Baxter(BAX)2025-05-01 11:17Financial Performance - First-quarter sales from continuing operations totaled $2.63 billion, representing a 5% increase on both a reported and operational basis, exceeding the company's previous guidance[4] - Adjusted diluted EPS from continuing operations for the first quarter was $0.55, surpassing the company's prior guidance of $0.47 to $0.50 per diluted share[8] - Baxter has raised the lower end of its full-year 2025 adjusted diluted EPS guidance to a range of $2.47 to $2.55[4] - For full-year 2025, Baxter expects sales growth from continuing operations of 7% to 8% on a reported basis and 4% to 5% on an operational basis[11] - The company anticipates second-quarter 2025 sales growth from continuing operations of 4% to 5% on a reported basis and 1% to 2% on an operational basis[12] - Net sales for Q1 2025 were $2,625 million, a 5% increase from $2,490 million in Q1 2024[26] - The company reported a total operating income of $58 million for Q1 2025, down from $115 million in Q1 2024[35] - Free cash flow from continuing operations was $(221) million in Q1 2025, compared to $(43) million in Q1 2024[39] - The company anticipates U.S. GAAP sales growth of 4% - 5% for Q2 2025 and 7% - 8% for the full year 2025[44] - Adjusted diluted EPS guidance for Q2 2025 is projected to be between $0.59 and $0.63, and for FY 2025 between $2.47 and $2.55[44] Segment Performance - Medical Products & Therapies segment sales reached approximately $1.26 billion, a 3% increase on a reported basis and 6% on an operational basis, driven by strong demand in Infusion Therapies & Technologies[7] - Healthcare Systems & Technologies segment sales totaled approximately $704 million, reflecting a 6% increase on both a reported and operational basis, supported by strong U.S. sales[10] - Pharmaceuticals segment sales were approximately $581 million, showing a 1% increase on a reported basis and 3% on an operational basis, with mid-single-digit growth in specialty injectables[10] - Infusion Therapies & Technologies segment reported sales of $994 million in Q1 2025, up 3% from $966 million in Q1 2024, with operational sales growth of 6%[33] - Medical Products & Therapies segment achieved sales of $1,262 million in Q1 2025, a 3% increase from $1,229 million in Q1 2024, with operational sales growth of 6%[33] - Healthcare Systems & Technologies segment saw sales rise to $704 million in Q1 2025, a 6% increase from $667 million in Q1 2024, with operational sales growth of 6%[33] Cost and Income Analysis - Cost of sales increased by 15% to $1,764 million, compared to $1,529 million in the previous year[26] - Gross margin decreased by 10% to $861 million, representing 32.8% of net sales, down from 38.6%[26] - Operating income fell by 50% to $58 million, which is 2.2% of net sales, down from 4.6%[26] - Adjusted operating income (excluding special items) increased by 28% to $392 million from $307 million[26] - Adjusted income from continuing operations (excluding special items) rose by 56% to $285 million compared to $183 million[26] - Net income attributable to Baxter stockholders increased to $126 million from $37 million[26] - Adjusted diluted EPS from continuing operations (excluding special items) increased by 53% to $0.55 from $0.36[26] - The company reported a significant increase in income from discontinued operations, rising 88% to $62 million from $33 million[26] - The effective tax rate for income tax expense in 2025 was 2.4%[28] - The company reported a significant increase in intangible asset amortization costs in 2025, totaling $104 million[28] Research and Development - Research and development expenses increased by 17% to $140 million, representing 5.3% of net sales[26] Strategic Initiatives - Baxter introduced the Voalte Linq device, its first voice-activated technology, enhancing communication efficiency among care teams[10] - The company launched Hemopatch Sealing Hemostat with room temperature storage in Europe, optimizing accessibility for surgeons[10] - The company is focusing on optimizing its organization and cost structure to better align its manufacturing and supply chain with commercial activities[29] - The company incurred restructuring and business optimization costs in 2025 primarily related to initiatives following the sale of its former Kidney Care segment[29] - Incremental costs for compliance with EU medical device regulations were recognized, which the company views as a significant one-time regulatory change[31] - The company incurred charges related to Hurricane Helene amounting to $98 million in Q1 2025[35]