Baxter(US:BAX)2025-10-30 11:17Sales Performance - Third-quarter sales from continuing operations totaled approximately $2.84 billion, increasing 5% on a reported basis and 2% on an operational basis[4] - U.S. sales from continuing operations totaled approximately $1.54 billion, increasing 3% on a reported basis but declining 1% on an operational basis[8] - International sales from continuing operations reached approximately $1.29 billion, increasing 8% on a reported basis and 5% on an operational basis[8] - Medical Products & Therapies sales for the third quarter were approximately $1.33 billion, declining 1% on both a reported and operational basis[7] - Healthcare Systems & Technologies sales for the third quarter totaled approximately $773 million, increasing 3% on a reported basis[10] - Pharmaceuticals sales for the third quarter were approximately $632 million, reflecting a 7% increase on both a reported and operational basis[10] - Infusion Therapies & Technologies segment sales decreased by 4% to $1,023 million in Q3 2025 from $1,070 million in Q3 2024[44] - Advanced Surgery segment sales increased by 13% to $306 million in Q3 2025, up from $272 million in Q3 2024[44] - The Medical Products & Therapies segment reported sales of $1,329 million in Q3 2025, a slight decrease of 1% from $1,342 million in Q3 2024[44] - The Healthcare Systems & Technologies segment achieved sales of $773 million in Q3 2025, reflecting a 3% increase from $752 million in Q3 2024[44] - The Pharmaceuticals segment's sales rose by 7% to $632 million in Q3 2025, compared to $588 million in Q3 2024[44] - For the three months ended September 30, 2025, total net sales growth for continuing operations was reported at 5%, with operational sales growth at 2%[53] - For the nine months ended September 30, 2025, total net sales growth was 5%, with operational sales growth at 2%[55] Earnings and Income - Adjusted diluted earnings per share (EPS) from continuing operations for the third quarter was $0.69, representing a 41% increase over the prior year[8] - Income (loss) from continuing operations was $(51) million, compared to $61 million in Q3 2024[28] - Adjusted income (loss) from continuing operations (excluding special items) rose by 40% to $353 million, compared to $252 million in the previous year[28] - Adjusted diluted EPS from continuing operations (excluding special items) increased by 41% to $0.69, up from $0.49[28] - The company reported a net income of $171 million for the nine months ended September 30, 2025, compared to a net loss of $128 million in 2024[35] - Diluted earnings per share from continuing operations increased by 40% to $1.83 from $1.31 in the previous year[35] - The company's net income for the nine months ended September 30, 2025, was $1,238 million, with diluted earnings per share of $1.85, reflecting a gross margin of 40.6%[37] - Adjusted diluted EPS guidance for FY 2025 is projected to be between $2.35 and $2.40[56] Costs and Expenses - Cost of sales increased by 13% to $1,885 million, compared to $1,666 million in the previous year[28] - Gross margin decreased by 8% to $950 million, with a gross margin percentage of 33.5%, down from 38.3%[28] - The company incurred $96 million in intangible asset amortization during the quarter[30] - The company incurred restructuring and business optimization costs related to the sale of its former Kidney Care segment and product line exits in 2024[33] - The company faced significant costs to comply with new European medical device regulations, which are considered a one-time regulatory change[33] - The company incurred costs related to centralizing research and development activities in 2024, impacting discontinued operations[39] - The company faced significant costs related to Hurricane Helene, impacting both continuing and discontinued operations in 2025[44] Future Projections - For full-year 2025, Baxter expects sales growth from continuing operations of 4% to 5% on a reported basis and 1% to 2% on an operational basis[12] - The company expects fourth-quarter 2025 sales growth from continuing operations of approximately 2% on a reported basis and a decline of approximately 2% on an operational basis[13] - The company projects a U.S. GAAP sales growth of approximately 2% for Q4 2025, with operational sales growth expected to be around -2%[56] - The exit of IV Solutions in China is expected to impact sales growth by approximately 50 basis points in FY 2025[56] - Foreign exchange effects are anticipated to reduce sales growth by approximately 100 basis points in Q4 2025 and 50 basis points for FY 2025[56] Special Items and Adjustments - Business optimization items contributed $25 million to the income, with a net impact of $0.05 per share[30] - The company reported a gain of $37 million from the sale of Kidney Care, impacting earnings by $0.07 per share[30] - Tax matters resulted in a net impact of $(213) million, affecting earnings by $(0.07) per share[30] - Special items included in the results for 2025 amounted to $1,082 million, impacting the net income attributable to Baxter stockholders, which was $1,087 million for the same period[38] - The effective tax rate for income tax expense was reported at 30.2% for the nine months ended September 30, 2025[38] - The effective tax rate for income tax expense was 4.3%[30] - The effective tax rate for income tax expense in 2024 was reported at (1.6)%[38] Operational Efficiency - Operating income rose by 11% to $172 million, representing 6.1% of net sales, compared to 5.7% in Q3 2024[28] - Interest expense decreased by 33% to $58 million, down from $87 million in the prior year[28] - The company experienced a 142.1% increase in operating income before income taxes, reflecting improved operational efficiency[30] - Adjusted operating income (excluding special items) increased by 8% to $423 million, up from $391 million[28] - Adjusted operating income (excluding special items) increased by 17% to $1,238 million from $1,055 million in the previous year[35] Shareholder Information - Net income attributable to Baxter stockholders was $(46) million, a significant decrease from $140 million in Q3 2024[28] - The weighted-average diluted shares as reported were 514 million, with adjusted shares at 515 million[30] - The company reported a gross margin of 38.4% for the nine months ended September 30, 2024, with a net income of $(128) million[38] - The adjusted net income for the nine months ended September 30, 2025, was $1,096 million, with adjusted diluted earnings per share of $2.13[38]