Core Insights - Baxter International reported quarterly earnings of $0.59 per share, missing the Zacks Consensus Estimate of $0.60 per share, and down from $0.68 per share a year ago, representing an earnings surprise of -1.67% [1] - The company posted revenues of $2.81 billion for the quarter ended June 2025, missing the Zacks Consensus Estimate by 0.28%, and down from $3.81 billion year-over-year [2] - Baxter has surpassed consensus EPS estimates three times over the last four quarters and topped consensus revenue estimates two times in the same period [2] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.64 on revenues of $2.9 billion, and for the current fiscal year, it is $2.50 on revenues of $11.35 billion [7] - The estimate revisions trend for Baxter was mixed ahead of the earnings release, resulting in a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market [6] Industry Context - The Medical - Products industry, to which Baxter belongs, is currently in the bottom 26% of over 250 Zacks industries, suggesting potential challenges for stock performance [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact investor sentiment and stock performance [5]

Core Insights - Baxter International Inc. reported second-quarter 2025 adjusted earnings per share (EPS) of 59 cents, missing the Zacks Consensus Estimate of 60 cents by 1.7%, but showing a 28.3% improvement from the previous year [1] - Revenues from continued operations totaled $2.81 billion, reflecting a 4.3% increase on a reported basis but missing estimates by 0.4% [2] - The company's shares declined 8.9% in pre-market trading following the results, with a year-to-date loss of 3.8% compared to the industry's growth of 6% [2] Revenue Details - Total revenues from continued operations were $2.81 billion, up 4.3% reported and 1% operationally, but missed estimates by 0.4% [2] - The Medical Products & Therapies segment generated $1.32 billion in sales, flat year over year on a reported basis and up 1% operationally [4] - Infusion Therapies & Technologies sales were $1.02 billion, down 2% year over year, while Advanced Surgery sales reached $296 million, up 7% year over year [5] Segment Performance - Healthcare Systems and Technologies segment sales were $767 million, up 3% year over year, driven by growth in Care & Connectivity Solutions [7] - Pharmaceuticals segment sales totaled $612 million, up 2% year over year, with Drug Compounding showing strength [8] - Other segment revenues amounted to $111 million, reflecting a significant increase of 405% year over year [9] Margin Analysis - Adjusted gross profit was $1.14 billion, with an adjusted gross margin contracting 170 basis points to 40.7% [10] - Adjusted operating income from continuing operations was $423 million, up 18.5% year over year, with an adjusted operating margin improving 180 basis points to 15.1% [11] Guidance - For Q3 2025, Baxter anticipates sales growth of 6-7% and adjusted EPS in the range of 58-62 cents, while the full-year 2025 adjusted EPS is projected to be $2.42-$2.52 [12][13] - The Zacks Consensus Estimate for full-year sales is pegged at $11.35 billion, indicating an 11.7% year-over-year decline [13] Product Developments - Baxter launched Hemopatch Sealing Hemostat with room temperature storage in several European markets, enhancing surgical efficiency [16] - The company has restored inventory levels for IV solutions following Hurricane Helene, which is expected to boost demand going forward [14][15]

Core Insights - Baxter International reported a revenue of $2.81 billion for the quarter ended June 2025, reflecting a year-over-year decline of 26.3% and an EPS of $0.59 compared to $0.68 a year ago, with revenue slightly below the Zacks Consensus Estimate of $2.82 billion, resulting in a surprise of -0.28% [1] Financial Performance - The company experienced a significant decline in net sales across various segments, with Pharmaceuticals in the U.S. reporting $187 million, which is a -5.1% change year-over-year and below the estimated $201.97 million [4] - International Pharmaceuticals net sales were $425 million, showing a +4.9% change compared to the previous year, but slightly below the estimated $434.72 million [4] - Healthcare Systems and Technologies International reported $205 million, exceeding the estimate of $198.81 million with a +3.5% year-over-year change [4] - Care and Connectivity Solutions International net sales reached $133 million, surpassing the estimate of $119.15 million, marking a +10.8% change year-over-year [4] - Overall, net sales for Pharmaceuticals totaled $612 million, slightly below the average estimate of $628.29 million, with a +1.7% year-over-year change [4] - Advanced Surgery net sales were $296 million, exceeding the estimate of $285.18 million, reflecting a +6.9% change year-over-year [4] - Other net sales surged to $111 million, significantly above the estimated $80.76 million, representing a remarkable +404.6% change year-over-year [4] - Front Line Care net sales were $293 million, slightly below the estimate of $299.81 million, with a -1% year-over-year change [4] - Infusion Therapies and Technologies reported $1.02 billion, below the estimate of $1.06 billion, with a -2% year-over-year change [4] - Medical Products and Therapies net sales were $1.32 billion, slightly below the estimate of $1.35 billion, with a -0.2% year-over-year change [4] Stock Performance - Baxter's shares have returned -9.9% over the past month, contrasting with the Zacks S&P 500 composite's +2.7% change, indicating underperformance relative to the broader market [3] - The stock currently holds a Zacks Rank 3 (Hold), suggesting it may perform in line with the market in the near term [3]

Financial Data and Key Metrics Changes - In Q2 2025, sales from continuing operations grew 4% on a reported basis and 1% on an operational basis, with adjusted earnings per share increasing 28% to $0.59 compared to the prior year [5][6][26] - Adjusted gross margins from continuing operations were 14.7%, a decrease of 170 basis points year-over-year, primarily due to lower manufacturing volumes and an unfavorable product mix [19][22] - Adjusted operating margin improved to 15.1%, up 180 basis points from the prior year, reflecting operational execution and TSA income [22][24] Business Line Data and Key Metrics Changes - Medical Products and Therapies (MPT) segment sales were $1.3 billion, increasing 1%, with strong demand for advanced surgery products offset by softness in infusion therapies [9][10] - Advanced Surgery sales totaled $296 million, growing 5% globally, driven by demand for hemostats and sealants [14] - Pharmaceutical segment sales were $612 million, increasing 1%, with injectables and anesthesia declining 4% due to a difficult comparison to the prior year [16][17] Market Data and Key Metrics Changes - U.S. injectables experienced a decline in demand, attributed to a shift towards IV push protocols and lower patient admissions [18][64] - International sales in Care and Connectivity Solutions increased 7%, while U.S. sales rose 3% [15] - Frontline care sales declined 1% year-over-year, reflecting a high single-digit decline internationally [16] Company Strategy and Development Direction - The company aims to enhance operational effectiveness and improve performance, focusing on innovation and growth opportunities [6][7] - A strategic partnership with Visient was announced to ensure reliable access to IV fluids during supply disruptions [11] - The appointment of Andrew Heider as the new CEO is expected to bring fresh perspectives and drive growth [36][38] Management's Comments on Operating Environment and Future Outlook - Management acknowledged softness in demand for certain products and the impact of fluid conservation efforts on sales [5][6][28] - The company expects total sales growth of 6% to 7% on a reported basis for 2025, with operational sales growth revised down to 3% to 4% [27][34] - Management remains optimistic about resuming shipments of the NOVUM infusion pump and expects fluid conservation levels to improve over time [29][30] Other Important Information - The company incurred negative free cash flows of $144 million year-to-date but generated $77 million of positive free cash flows in Q2 [26][27] - The anticipated impact from tariffs is now estimated at $40 million for 2025, down from previous estimates [32] Q&A Session Summary Question: Impact of NOVUM on sales and operating margin - Management confirmed no impact from NOVUM in Q2, emphasizing confidence in the platform despite a voluntary pause in shipments [43][44] Question: Evolution of business trends throughout the quarter - Management noted that business trends worsened, particularly in U.S. injectables, and emphasized a cautious approach for the second half of the year [62][63] Question: Timelines for stranded costs and TSA income - Management is on track to mitigate stranded costs by 2027 and is managing TSA income to avoid gaps in financial performance [70][72] Question: Long-term growth model and revenue growth expectations - Management expressed optimism about returning to 4% to 5% revenue growth, driven by new product launches and easing headwinds [84][90]

Financial Data and Key Metrics Changes - Second quarter sales from continuing operations grew 4% on a reported basis and 1% on an operational basis, with adjusted earnings per share from continuing operations at $0.59, increasing 28% over the prior year [5][10][24] - Adjusted gross margins from continuing operations were 14.7%, a decrease of 170 basis points compared to the prior year [19] - Adjusted operating margin was 15.1%, improving 180 basis points compared to the prior year [21] Business Segment Data and Key Metrics Changes - Medical Products and Therapies (MPT) segment sales were $1.3 billion, increasing 1% in the quarter, with ITT division sales declining 1% to $1 billion [10][11] - Advanced Surgery sales totaled $296 million, growing 5% globally [14] - Healthcare Systems and Technologies (HST) sales were $767 million, increasing 2%, with Care and Connectivity Solutions (CCS) division sales rising 4% to $474 million [15] - Pharmaceutical segment sales totaled $612 million, increasing 1%, with injectables and anesthesia sales declining 4% [16][17] Market Data and Key Metrics Changes - U.S. patient admissions were slightly lower than anticipated, impacting demand for certain products [11] - International sales in CCS increased 7%, while frontline care sales declined 1% compared to the prior year [15][16] Company Strategy and Development Direction - The company aims to enhance operational effectiveness and improve performance, focusing on innovation and growth opportunities [6][30] - A strategic partnership with Visient was announced to ensure reliable access to IV fluids during supply disruptions [12] - The company is committed to maintaining a comprehensive IV Solutions portfolio and is optimistic about the recovery of hospital practices over time [11][12] Management's Comments on Operating Environment and Future Outlook - Management acknowledged softness in demand for certain products and the impact of fluid conservation efforts on sales [5][11] - The company expects total sales growth of 6% to 7% on a reported basis for 2025, with operational sales growth revised to 3% to 4% [26][34] - Management remains confident in the fundamentals of the business and anticipates a return to normal practices in the healthcare sector [30][66] Other Important Information - The company has incurred negative free cash flows of $144 million year-to-date but generated $77 million of positive free cash flows in the second quarter [25] - The anticipated impact from tariffs is estimated at approximately $40 million in 2025, a reduction from previous estimates [32] Q&A Session Summary Question: Impact of NOVUM on sales and operating margin - Management confirmed no impact from NOVUM in the second quarter and expressed confidence in the platform despite a voluntary pause in shipments [42][44] Question: Guidance implications if NOVUM issues persist - The low end of guidance assumes no further shipments of NOVUM for the rest of the year, capturing potential downside risks [48][52] Question: Evolution of business trends throughout the quarter - Management noted that business trends worsened, particularly in U.S. injectables, and emphasized a more reserved approach for the second half of the year [62][66] Question: TSA income and stranded costs management - Management is on track to mitigate stranded costs and ensure that TSA roll-off does not outpace stranded cost reductions [71][73] Question: Revenue guide reduction specifics - Management did not provide specific numbers but indicated that the low end of guidance assumes no improvement in fluid conservation [78] Question: Long-term growth model and new CEO's impact - Management highlighted ongoing innovation and new product launches as key to returning to 4% to 5% revenue growth, with optimism for 2026 [83][88]

Q2 2025 Performance Summary - Worldwide sales from continuing operations grew 4% on a reported basis and 1% on an operational basis[18] - Adjusted earnings per share from continuing operations totaled $0.59 per diluted share, increasing 28% as compared to the prior year period[18] - Gross Margin was 353%, with a year-over-year change of (300 bps)[20] - Operating Margin was 68%, with a year-over-year change of +20 bps[20] - Diluted EPS was $024, with a year-over-year change of +26%[20] H1 2025 Performance Summary - Sales were $54 billion, with a +5% Reported and +3% Operational[20] - Gross Margin was 341%, with a year-over-year change of (430 bps)[20] - Operating Margin was 46%, with a year-over-year change of (110 bps)[20] - Diluted EPS was $036, with a year-over-year change of +80%[20] - Adjusted Diluted EPS was $115, with a year-over-year change of +40%[20] Q3 & FY 2025 Outlook - Third-Quarter 2025 Sales Growth Reported (Continuing Operations) Guidance is 6% - 7%[60] - Third-Quarter 2025 Operational Sales Growth (Continuing Operations) Guidance is ~ 3% - 4%[60] - Third-Quarter 2025 Adjusted Diluted EPS Continuing Operations is $058 - $062[60] - Full-Year 2025 Sales Growth Reported (Continuing Operations) Guidance is 6% - 7%[62] - Full-Year 2025 Operational Sales Growth (Continuing Operations) Guidance is 3% - 4%[62] - Full-Year 2025 Adjusted Diluted EPS Continuing Operations is $242 - $252[62]

[Baxter Q2 2025 Earnings Release](index=1&type=section&id=Baxter%20Reports%20Second-Quarter%202025%20Results) [Q2 2025 Performance Highlights](index=1&type=section&id=Q2%202025%20Performance%20Highlights) Baxter's Q2 2025 sales from continuing operations reached $2.81 billion, up 4% reported and 1% operational, with adjusted diluted EPS at $0.59 Q2 2025 Key Financial Metrics | Metric | Value | Basis | Growth (vs. Q2 2024) | | :--- | :--- | :--- | :--- | | Sales from Continuing Operations | $2.81 billion | Reported | +4% | | Sales from Continuing Operations | $2.81 billion | Operational | +1% | | GAAP Diluted EPS from Continuing Operations | $0.24 | GAAP | +26% | | Adjusted Diluted EPS from Continuing Operations | $0.59 | Non-GAAP | +28% | - The company appointed **Andrew Hider** as the new President and CEO to accelerate innovation, growth, and operational effectiveness[3](index=3&type=chunk)[4](index=4&type=chunk) [Second-Quarter 2025 Segment Performance](index=2&type=section&id=Second-Quarter%202025%20Segment%20Results) Q2 2025 segment performance was mixed, with Medical Products & Therapies flat at $1.32 billion, Healthcare Systems & Technologies up 3% to $767 million, and Pharmaceuticals up 2% to $612 million Q2 2025 Sales by Segment (Continuing Operations) | Segment | Sales (approx.) | Reported Growth | Operational Growth | | :--- | :--- | :--- | :--- | | Medical Products & Therapies | $1.32 billion | 0% | +1% | | Healthcare Systems & Technologies | $767 million | +3% | +2% | | Pharmaceuticals | $612 million | +2% | +1% | - Medical Products & Therapies performance was impacted by softness in **IV solutions demand** due to fluid conservation efforts post-Hurricane Helene[8](index=8&type=chunk) - Pharmaceuticals growth was driven by **Drug Compounding** strength, partially offset by a **1% decline in Injectables** and a low double-digit decline in Anesthesia sales[9](index=9&type=chunk) [Recent Business Highlights](index=3&type=section&id=Recent%20Highlights) Baxter restored IV solution inventory post-Hurricane Helene, partnered with Vizient for supply reliability, and published its 2024 Corporate Responsibility Report - Inventory levels for **IV solutions** from the North Cove, N.C. site were restored, and all product allocations removed post-Hurricane Helene[9](index=9&type=chunk) - Partnered with **Vizient** to include **IV fluids** in its Vizient Reserve Program, ensuring reliable access during supply disruptions[9](index=9&type=chunk) - Published the **2024 Corporate Responsibility Report**, detailing progress on 2030 sustainability goals[10](index=10&type=chunk) [2025 Financial Outlook](index=4&type=section&id=2025%20Financial%20Outlook) Baxter updated its full-year 2025 forecast to 6-7% reported sales growth and adjusted diluted EPS of $2.42-$2.52, with similar Q3 expectations Full-Year 2025 Financial Guidance | Metric | Guidance Range | | :--- | :--- | | Sales Growth (Reported) | 6% to 7% | | Sales Growth (Operational) | 3% to 4% | | Adjusted Diluted EPS | $2.42 to $2.52 | Third-Quarter 2025 Financial Guidance | Metric | Guidance Range | | :--- | :--- | | Sales Growth (Reported) | 6% to 7% | | Sales Growth (Operational) | 3% to 4% | | Adjusted Diluted EPS | $0.58 to $0.62 | [Financial Statements & Reconciliations](index=10&type=section&id=Financial%20Statements%20%26%20Reconciliations) [Consolidated Statements of Income (Loss)](index=10&type=section&id=Consolidated%20Statements%20of%20Income%20%28Loss%29) Q2 2025 net sales from continuing operations grew 4% to $2.81 billion, with GAAP income at $122 million, reflecting Kidney Care exclusion Q2 2025 vs Q2 2024 Income Statement Highlights (Continuing Operations) | Metric (in millions, except EPS) | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | Net Sales | $2,810 | $2,694 | 4% | | Gross Margin | $991 | $1,031 | (4)% | | Operating Income | $191 | $179 | 7% | | Income from Continuing Operations | $122 | $95 | 28% | | Diluted EPS from Continuing Operations | $0.24 | $0.19 | 26% | Six Months 2025 vs 2024 Income Statement Highlights (Continuing Operations) | Metric (in millions, except EPS) | YTD 2025 | YTD 2024 | % Change | | :--- | :--- | :--- | :--- | | Net Sales | $5,435 | $5,184 | 5% | | Gross Margin | $1,852 | $1,992 | (7)% | | Operating Income | $249 | $294 | (15)% | | Income from Continuing Operations | $186 | $101 | 84% | | Diluted EPS from Continuing Operations | $0.36 | $0.20 | 80% | [Segment Performance Analysis](index=16&type=section&id=Segment%20Performance%20Analysis) For H1 2025, Medical Products & Therapies sales grew 1% to $2.58 billion, Healthcare Systems & Technologies 4% to $1.47 billion, and Pharmaceuticals 1% to $1.19 billion Six Months Ended June 30, 2025 Sales by Segment | Segment | Sales (in millions) | Actual Growth | Operational Growth | | :--- | :--- | :--- | :--- | | Medical Products & Therapies | $2,582 | 1% | 3% | | Healthcare Systems & Technologies | $1,471 | 4% | 4% | | Pharmaceuticals | $1,193 | 1% | 2% | | Total - Continuing Operations | $5,435 | 5% | 3% | Six Months Ended June 30, 2025 Segment Operating Income | Segment | Operating Income (in millions) | % of Segment Net Sales | | :--- | :--- | :--- | | Medical Products & Therapies | $483 | 18.7% | | Healthcare Systems & Technologies | $211 | 14.3% | | Pharmaceuticals | $127 | 10.6% | Six Months Ended June 30, 2025 Sales by Geography (Continuing Ops) | Region | Sales (in millions) | % Growth | | :--- | :--- | :--- | | U.S. | $3,026 | 7% | | International | $2,409 | 3% | | Total | $5,435 | 5% | [Reconciliation of GAAP to Non-GAAP Measures](index=11&type=section&id=Reconciliation%20of%20GAAP%20to%20Non-GAAP%20Measures) Baxter reconciled Q2 2025 adjusted diluted EPS of $0.59 from GAAP EPS of $0.24, operational sales growth of 1% from 4% reported, and reported negative free cash flow of $144 million for H1 Q2 2025 GAAP to Adjusted EPS Reconciliation (Continuing Operations) | Item | Per Diluted Share | | :--- | :--- | | **Reported GAAP EPS** | **$0.24** | | Intangible asset amortization | $0.23 | | Business optimization items | $0.03 | | Product related reserves | $0.03 | | Hurricane Helene costs | $0.03 | | Separation-related costs | $0.02 | | Other items | $0.01 | | **Adjusted Non-GAAP EPS** | **$0.59** | Q2 2025 Reported to Operational Sales Growth Reconciliation | Item | Impact on Growth | | :--- | :--- | | **Net Sales Growth As Reported** | **4%** | | Kidney Care MSA | (4)% | | Exit of IV Solutions in China | 1% | | Foreign Exchange (FX) | (0)% | | **Operational Sales Growth** | **1%** | Free Cash Flow Reconciliation (Six Months Ended June 30, 2025) | Item (in millions) | Amount | | :--- | :--- | | Cash flows from operations - continuing operations | $118 | | Less: Capital expenditures - continuing operations | ($262) | | **Free cash flow - continuing operations** | **($144)** | [Other Information](index=5&type=section&id=Other%20Information) [Non-GAAP Financial Measures](index=5&type=section&id=Non-GAAP%20Financial%20Measures) Baxter utilizes non-GAAP measures like operational sales growth and adjusted diluted EPS to clarify core performance by excluding variable or unusual items - Management uses non-GAAP measures internally for **financial planning**, **monitoring business unit performance**, and **determining incentive compensation**[16](index=16&type=chunk) - **Operational sales growth** is a non-GAAP measure excluding Kidney Care MSA impact, IV solutions exit in China, and calculated at constant currency rates[17](index=17&type=chunk) - Special items excluded from adjusted earnings include **intangible asset amortization**, **business optimization charges**, **acquisition costs**, **separation costs**, **Hurricane Helene costs**, and certain legal and tax matters[19](index=19&type=chunk) [Forward-Looking Statements](index=6&type=section&id=Forward-Looking%20Statements) This report contains forward-looking statements subject to risks including global economic conditions, supply chain disruptions, regulatory actions, and integration of acquisitions - Forward-looking statements cover the **financial outlook for Q3 and full-year 2025** and operational activities[22](index=22&type=chunk) - Major risks include impacts from **global economic conditions**, **supply chain disruptions**, **inflation**, and **geopolitical events**[23](index=23&type=chunk) - Other cited risks include **regulatory actions by the FDA**, **raw material availability**, **quality program failures**, and **IT system breaches**[23](index=23&type=chunk)[24](index=24&type=chunk)

In its upcoming report, Baxter International (BAX) is predicted by Wall Street analysts to post quarterly earnings of $0.60 per share, reflecting a decline of 11.8% compared to the same period last year. Revenues are forecasted to be $2.82 billion, representing a year-over-year decrease of 26.1%. Over the past 30 days, the consensus EPS estimate for the quarter has remained unchanged. This demonstrates the covering analysts' collective reassessment of their initial projections during this period. Prior to a ...

Core Viewpoint - Baxter International Inc. is set to announce its second-quarter 2025 results on July 31, with expectations of moderate growth despite a projected decline in revenues and earnings compared to the previous year [1][2][3]. Q2 Estimates - The consensus estimate for revenues is $2.82 billion, reflecting a 26.1% decline from the prior year's quarter [2]. - The consensus estimate for earnings is 60 cents per share, indicating an 11.8% year-over-year decline [2]. - The model estimates total revenues from continuing operations to improve by 1.3% at constant currency to $2.81 billion, with adjusted earnings per share expected to decline 11.4% to 60 cents [2]. Important Factors to Note - Baxter is anticipated to report moderate growth supported by strong execution across core segments and easing operational challenges [3]. - Sales from continuing operations grew 5% in the first quarter, driven by the Medical Products & Therapies and Healthcare Systems & Technologies segments [3]. - For Q2, the company expects reported sales growth of approximately 4% to 5% and operational growth in the 1% to 2% range [3]. Margin Profile - Baxter's adjusted operating margin improved by 260 basis points year-over-year to 14.9%, aided by strong top-line delivery and lower SG&A expenses [4]. - The margin stability is expected to continue due to operational efficiencies and ongoing cost containment initiatives [4]. Operational Performance - The completion of Baxter's transformation strategy, including the spin-offs of the Kidney Care and BioPharma Solutions businesses, has streamlined its portfolio [5]. - Management expects adjusted earnings per share in the range of 59 to 63 cents, building on the 55 cents reported in the previous quarter [5]. Recovery from Hurricane Helene - Manufacturing at the North Cove facility has returned to pre-hurricane levels, allowing for inventory replenishment and reduced product allocations [6]. - The company anticipates normalized ordering patterns as IV solution product allocations are removed [6]. Segmental Overview - The Medical Products & Therapies segment reported a 6% operational growth in Q1, with sales reaching $1.3 billion, driven by the U.S. infusion systems portfolio [7][9]. - The Healthcare Systems & Technologies segment also saw a 6% operational increase in Q1, with sales totaling $704 million, led by the Care and Connectivity Solutions division [10]. - The Pharmaceuticals segment reported 3% operational growth in Q1, with sales of $581 million, primarily driven by specialty injectables [11]. Other Sales and Revenue Streams - Other sales totaled $15 million in Q1, with drug compounding business growing 2% [12]. - MSA revenue from Vantive was reported at $63 million in Q1, with expectations of around $80 million for Q2 [12].

Group 1 - The FDA reported that as of June 27, Baxter has documented 79 severe injuries and 2 deaths related to infusion pump issues [1]