2 weeks Ago By Aaron Bry
Baxter International Inc BAX . has shut down its largest manufacturing facility following significant damage caused by Hurricane Helene. The hurricane, which hit the Southeast of the U.
S. with deadly force, triggered power outages and flooding across the region. Baxter's North Cove plant, located in Marion, North Carolina, is the nation's biggest producer of intravenous and peritoneal dialysis solutions.
The company has stated that this disruption will likely have a negative effect on its financial performance. On Monday, Baxter's shares initially fell as much as 4.1%, but later settled at a 2.
3% decline, trading at $38.01 by midday in New York. Baxter’s stock ended up closing right below $38 a share Monday.
Read Also: Hurricane Helene Exposes Vulnerability Of Florida’s Home Insurance Market Patrick Wood , an equity analyst at Morgan Stanley, covered the hurricane-related disruption in a note Monday, outlining the potential financial harm caused by the storm. Wood pointed to a 2017 hurricane, which impacted Baxter’s capacity in Puerto Rico, as a precedent for Hurricane Helene. “To sense check, if we assumed a $140mn impact in BAX's Q4 (given Q3 is essentially over), that implies about 4 days worth of shutdown for the entire US Chronic Therapies and Infusion Therapies businesses,” Wood wrote in the note.
“Though in reality more given this is unlikely the only facility where PD and IV solutions are produced and BAX can presumably shift capacity around.” Hurricane Helene, a Category 4 storm, struck Florida on Thursday with winds reaching 140 miles per hour and moved northward. The storm caused severe flooding, including a levee breach that sent water into Baxter’s facility.
The flooding damaged stock and raw materials, according to a company spokesperson. It remains unclear if the plant closure will affect medical procedures in the U.S.
, though Wells Fargo analysts noted that other companies, such as ICU Medical, Fresenius Kabi and B Braun SE, may be able to compensate for Baxter's supply loss. Baxter is working closely with local officials to bring the North Cove plant back online. Fortunately, none of the facility's 2,500 employees were injured.
However, the company is still verifying the safety of its workforce as communication in the area has been hampered by outages in cellular service. Keep Reading: • Hurricane Helene Devastates Southeastern U.S.
, Slamming Infrastructure And Leaving Millions Powerless Photo: Unsplash © 2024 Benzinga.com. Benzinga does not provide investment advice.
All rights reserved..
