We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Baxter Q2 Preview: Can Core Segments Deliver Another Solid Quarter?
Read MoreHide Full Article
Key Takeaways
BAX expects 4%-5% reported sales growth in Q2, led by strong execution in core business segments.
BAX saw 6% operational growth in MPT and HST segments in Q1, both exceeding the companys expectations.
BAX projects stable Q2 margins with EPS of $0.59-$0.63, aided by recovery and cost containment efforts.
Baxter International Inc. (BAX - Free Report) is scheduled to release second-quarter 2025 results on July 31, before the opening bell. In the last reported quarter, the company’s earnings beat the Zacks Consensus Estimate by 14.58%. BAX’s earnings beat estimates in each of the trailing four quarters, delivering an average surprise of 7.93%.
Q2 Estimates
Currently, the consensus estimate for revenues is pegged at $2.82 billion, indicating a decline of 26.1% from the prior-year quarter’s reported figure. The consensus mark for earnings is pinned at 60 cents per share, implying an 11.8% year-over-year decline.
Our model estimates total revenues from continuing operations to improve 1.3% at constant currency (cc) to $2.81 billion. Adjusted earnings per share are expected to decline 11.4% to 60 cents.
Important Factors to Note
Baxter is expected to report moderate growth when it announces results for the second quarter of 2025, supported by strong execution across core segments and easing operational headwinds. Sales from continuing operations grew 5% on both a reported and operational basis during the first quarter, exceeding management’s guidance and driven by outperformance in the Medical Products & Therapies and Healthcare Systems & Technologies segments. For the second quarter, the company has guided for continued sales growth in the low-to-mid single digits, anticipating a reported increase of approximately 4% to 5% and operational growth in the 1% to 2% range.
Baxter’s margin profile rebounded in the first quarter, reflecting the absence of prior-year one-time impacts such as goodwill impairment in Front Line Care and separation-related expenses. Adjusted operating margin improved 260 basis points year over year to 14.9%, with additional support from strong top-line delivery, lower SG&A expenses, and higher TSA reimbursements from Vantive. These factors, along with operational efficiencies and ongoing cost containment initiatives, are likely to support sequential margin stability.
Operational performance also benefited from the company’s recently completed transformation strategy, which included the spin-offs of the Kidney Care and BioPharma Solutions businesses. The streamlined portfolio, now centered around core therapeutic and digital care platforms, is enabling more agile execution and innovation across its supply chain and customer channels. Management expects adjusted earnings per share in the range of 59 to 63 cents, building on the 55 cents reported in the previous quarter.
Baxter’s rapid recovery from Hurricane Helene has further stabilized operations. Manufacturing at the North Cove facility has returned to pre-hurricane levels, enabling inventory replenishment and reducing product allocations. The company noted that most IV solution product allocations would be removed by mid-May, setting the stage for normalized ordering patterns in the period under review. This recovery, combined with improved hospital stocking activity and steady infusion system momentum, reinforces Baxter’s ability to sustain operational continuity and serve demand effectively.
BAX’s Segmental Overview
The Medical Products & Therapies (MPT) segment delivered a solid performance in the first quarter, with sales rising 6% operationally to $1.3 billion, ahead of expectations. Growth was led by double-digit gains in the U.S. infusion systems portfolio, driven by continued rollout momentum of the Novum IQ pump platform. Nutrition products also contributed meaningfully, particularly in the United States, where alternate site penetration and improved supply helped clear backorders. IV solutions returned to pre-hurricane production levels at the North Cove facility, although hospital fluid conservation persisted. Heading into the second quarter, Baxter expects IV solutions utilization to gradually improve as product allocations are removed and hospital behavior normalizes, setting up MPT for steady performance.
Healthcare Systems & Technologies(HST) had an impressive first quarter, with segment sales increasing 6% operationally to $704 million, outpacing internal expectations. The standout performer was the Care and Connectivity Solutions (CCS) division, which posted 14% U.S. growth, fueled by strong momentum in Patient Support Systems and ICU/Med-Surg product lines. Competitive wins and customer upgrades added further lift, and capital orders rose 20% in the United States, creating a strong backlog. While international CCS sales were weaker, a pickup in capital orders outside the United States is expected to contribute to future growth. This healthy backlog and ongoing digital upgrades likely supported second-quarter performance, even as the company remained watchful of macro-related shifts in hospital capital spending.
Baxter’s Pharmaceuticals segment reported 3% operational growth in the first quarter, with sales totaling $581 million. Growth was primarily led by specialty injectables, especially outside the United States, where strong demand and government orders boosted performance. However, anesthesia sales declined and continued to weigh slightly on the segment. Management expects the anesthesia business to stabilize going forward, while maintaining momentum in injectables. For the second quarter, international demand trends and any near-term tariff impacts were likely monitored, though pharmaceutical tariffs were not factored into guidance.
Other sales, which are not allocated to a specific segment and primarily include products and services provided directly through certain manufacturing facilities, totaled $15 million in the first quarter. Baxter’s drug compounding business grew 2%, though this reflected a tough comparison to the same period last year. Additionally, the company reported $63 million in MSA revenue from Vantive, which contributed to reported growth but is excluded from operational metrics. For the second quarter, MSA revenue is expected to come in around $80 million. While these transitional revenue streams continue to provide near-term support, investors will likely ask questions about management’s plan on gradually offsetting their impact as they phase out over time.
Our proven model does not conclusively predict an earnings beat for Baxter this time around. The combination of a positive Earnings ESPand a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. This is not the case here, as you will see below.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is 0.00% for Baxter.
You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Zacks Rank: Baxter currently has a Zacks Rank #3.
Stocks Worth a Look
Here are some other medical stocks worth considering, as these also have the right combination of elements to post an earnings beat this time:
GeneDx Holdings (WGS - Free Report) has an Earnings ESP of +5.26% and a Zacks Rank #2. The company is slated to release second-quarter 2025 results on July 29.
WGS’ earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 145.82%. The Zacks Consensus Estimate for the company’s second-quarter EPS is expected to increase 190.9% from the year-ago quarter figure.
Cencora (COR - Free Report) has an Earnings ESP of +1.49% and a Zacks Rank #2. The company is set to release third-quarter fiscal 2025 results on Aug. 6.
COR’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 6%. The Zacks Consensus Estimate for COR’s fiscal third-quarter EPS is expected to surge 13.2% from the year-ago reported figure.
Cardinal Health (CAH - Free Report) has an Earnings ESP of +0.72% and a Zacks Rank #2. The company is slated to release fourth-quarter fiscal 2025 results on Aug. 12.
CAH’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 10.3%. The Zacks Consensus Estimate for the company’s fiscal fourth-quarter EPS is expected to increase 10.3% from the year-ago quarter figure.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Baxter Q2 Preview: Can Core Segments Deliver Another Solid Quarter?
Key Takeaways
Baxter International Inc. (BAX - Free Report) is scheduled to release second-quarter 2025 results on July 31, before the opening bell. In the last reported quarter, the company’s earnings beat the Zacks Consensus Estimate by 14.58%. BAX’s earnings beat estimates in each of the trailing four quarters, delivering an average surprise of 7.93%.
Q2 Estimates
Currently, the consensus estimate for revenues is pegged at $2.82 billion, indicating a decline of 26.1% from the prior-year quarter’s reported figure. The consensus mark for earnings is pinned at 60 cents per share, implying an 11.8% year-over-year decline.
Our model estimates total revenues from continuing operations to improve 1.3% at constant currency (cc) to $2.81 billion. Adjusted earnings per share are expected to decline 11.4% to 60 cents.
Important Factors to Note
Baxter is expected to report moderate growth when it announces results for the second quarter of 2025, supported by strong execution across core segments and easing operational headwinds. Sales from continuing operations grew 5% on both a reported and operational basis during the first quarter, exceeding management’s guidance and driven by outperformance in the Medical Products & Therapies and Healthcare Systems & Technologies segments. For the second quarter, the company has guided for continued sales growth in the low-to-mid single digits, anticipating a reported increase of approximately 4% to 5% and operational growth in the 1% to 2% range.
Baxter’s margin profile rebounded in the first quarter, reflecting the absence of prior-year one-time impacts such as goodwill impairment in Front Line Care and separation-related expenses. Adjusted operating margin improved 260 basis points year over year to 14.9%, with additional support from strong top-line delivery, lower SG&A expenses, and higher TSA reimbursements from Vantive. These factors, along with operational efficiencies and ongoing cost containment initiatives, are likely to support sequential margin stability.
Operational performance also benefited from the company’s recently completed transformation strategy, which included the spin-offs of the Kidney Care and BioPharma Solutions businesses. The streamlined portfolio, now centered around core therapeutic and digital care platforms, is enabling more agile execution and innovation across its supply chain and customer channels. Management expects adjusted earnings per share in the range of 59 to 63 cents, building on the 55 cents reported in the previous quarter.
Baxter’s rapid recovery from Hurricane Helene has further stabilized operations. Manufacturing at the North Cove facility has returned to pre-hurricane levels, enabling inventory replenishment and reducing product allocations. The company noted that most IV solution product allocations would be removed by mid-May, setting the stage for normalized ordering patterns in the period under review. This recovery, combined with improved hospital stocking activity and steady infusion system momentum, reinforces Baxter’s ability to sustain operational continuity and serve demand effectively.
BAX’s Segmental Overview
The Medical Products & Therapies (MPT) segment delivered a solid performance in the first quarter, with sales rising 6% operationally to $1.3 billion, ahead of expectations. Growth was led by double-digit gains in the U.S. infusion systems portfolio, driven by continued rollout momentum of the Novum IQ pump platform. Nutrition products also contributed meaningfully, particularly in the United States, where alternate site penetration and improved supply helped clear backorders. IV solutions returned to pre-hurricane production levels at the North Cove facility, although hospital fluid conservation persisted. Heading into the second quarter, Baxter expects IV solutions utilization to gradually improve as product allocations are removed and hospital behavior normalizes, setting up MPT for steady performance.
Healthcare Systems & Technologies(HST) had an impressive first quarter, with segment sales increasing 6% operationally to $704 million, outpacing internal expectations. The standout performer was the Care and Connectivity Solutions (CCS) division, which posted 14% U.S. growth, fueled by strong momentum in Patient Support Systems and ICU/Med-Surg product lines. Competitive wins and customer upgrades added further lift, and capital orders rose 20% in the United States, creating a strong backlog. While international CCS sales were weaker, a pickup in capital orders outside the United States is expected to contribute to future growth. This healthy backlog and ongoing digital upgrades likely supported second-quarter performance, even as the company remained watchful of macro-related shifts in hospital capital spending.
Baxter’s Pharmaceuticals segment reported 3% operational growth in the first quarter, with sales totaling $581 million. Growth was primarily led by specialty injectables, especially outside the United States, where strong demand and government orders boosted performance. However, anesthesia sales declined and continued to weigh slightly on the segment. Management expects the anesthesia business to stabilize going forward, while maintaining momentum in injectables. For the second quarter, international demand trends and any near-term tariff impacts were likely monitored, though pharmaceutical tariffs were not factored into guidance.
Other sales, which are not allocated to a specific segment and primarily include products and services provided directly through certain manufacturing facilities, totaled $15 million in the first quarter. Baxter’s drug compounding business grew 2%, though this reflected a tough comparison to the same period last year. Additionally, the company reported $63 million in MSA revenue from Vantive, which contributed to reported growth but is excluded from operational metrics. For the second quarter, MSA revenue is expected to come in around $80 million. While these transitional revenue streams continue to provide near-term support, investors will likely ask questions about management’s plan on gradually offsetting their impact as they phase out over time.
Baxter International Inc. Price and EPS Surprise
Baxter International Inc. price-eps-surprise | Baxter International Inc. Quote
What the Zacks Model Unveils
Our proven model does not conclusively predict an earnings beat for Baxter this time around. The combination of a positive Earnings ESPand a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. This is not the case here, as you will see below.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is 0.00% for Baxter.
You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Zacks Rank: Baxter currently has a Zacks Rank #3.
Stocks Worth a Look
Here are some other medical stocks worth considering, as these also have the right combination of elements to post an earnings beat this time:
GeneDx Holdings (WGS - Free Report) has an Earnings ESP of +5.26% and a Zacks Rank #2. The company is slated to release second-quarter 2025 results on July 29.
WGS’ earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 145.82%. The Zacks Consensus Estimate for the company’s second-quarter EPS is expected to increase 190.9% from the year-ago quarter figure.
Cencora (COR - Free Report) has an Earnings ESP of +1.49% and a Zacks Rank #2. The company is set to release third-quarter fiscal 2025 results on Aug. 6.
COR’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 6%. The Zacks Consensus Estimate for COR’s fiscal third-quarter EPS is expected to surge 13.2% from the year-ago reported figure.
Cardinal Health (CAH - Free Report) has an Earnings ESP of +0.72% and a Zacks Rank #2. The company is slated to release fourth-quarter fiscal 2025 results on Aug. 12.
CAH’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 10.3%. The Zacks Consensus Estimate for the company’s fiscal fourth-quarter EPS is expected to increase 10.3% from the year-ago quarter figure.