BAX Stock Falls Following Q2 Earnings & Sales Miss, '25 EPS View Down

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]