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BAX Stock Falls Following Q4 Earnings Miss, Margins Contract
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Key Takeaways
BAX posted Q4 EPS of 44 cents, down 24%, missing estimates despite 8% revenue growth.
Adjusted gross margin fell 900 bps to 35.5%, with operating income down 16% year over year.
BAX sees 2026 sales flat to up 1% and EPS of $1.85-$2.05, below consensus estimates.
Baxter International Inc. (BAX - Free Report) reported fourth-quarter 2025 adjusted earnings per share (EPS) from continuing operations of 44 cents, which missed the Zacks Consensus Estimate of 53 cents by 17%. The bottom line declined 24% from the year-ago quarter’s level.
On a GAAP basis, the company reported a loss per share from continuing operations of $2.19 compared with 95 cents in the prior-year quarter.
The company’s continuing operations exclude its Kidney Care business, which was acquired by Carlyle in January 2025.
Baxter’s Revenue Details
Revenues from continued operations totaled $2.97 billion, up 8% on a reported basis and 3% on an operational basis. The figure beat the Zacks Consensus Estimate by 6.5%.
U.S. sales from continuing operations were $1.55 billion, up 3% reportedly and down 1% on an operational basis. International sales from continuing operations totaled $1.42 billion, reflecting an increase of 14% on a reported basis and 8% on an operational basis.
Shares of BAX lost 13.3% in pre-market trading following lower-than-expected quarterly earnings. The company’s shares have lost 7.2% in the past six months compared with the industry’s decline of 11.6%. The broader S&P 500 Index has increased 9.6% in the same period.
Image Source: Zacks Investment Research
BAX’s Segmental Details
Medical Products & Therapies
The segment includes Advanced Surgery and Infusion Therapies & Technologies categories. Sales in this segment totaled $1.39 billion, up 6% reportedly and 4% on an operational basis. The growth was driven by increased sales within the Infusion Therapies & Technologies division, driven by strength in IV solutions and continued strong global demand for Advanced Surgery products. This growth was partially offset by reduced sales in infusion systems due to the previously disclosed shipment and installation hold of the Novum IQ LVP.
Infusion Therapies and Technologies’ sales totaled $1.06 billion, up 4% year over year reportedly and 1% on an operational basis. Advanced Surgery category sales amounted to $328 million, up 12% year over year reportedly and up 11% on an operational basis.
Healthcare Systems and Technologies
The segment includes the Front Line Care category. It also consists of the Patient Support Systems and Surgical Solutions categories, which are clubbed as Care & Connectivity Solutions. Total sales in this segment were $827 million, up 5% year over year reportedly up and 4% on an operational basis. The performance reflected continued demand for the Care & Connectivity Solutions division, along with growth in the Front Line Care.
Front Line Care category sales totaled $290 million, up 4% year over year reportedly and up 3% on an operational basis. Care & Connectivity Solutions category sales amounted to $537 million, up 7% year over year reportedly and up 4% on an operational basis.
Pharmaceuticals
The segment presently includes two product categories — Injectables & Anesthesia and Drug Compounding. Total sales during the fourth quarter were $668 million, up 4% year over year reportedly and up 2% on an operational basis. The growth was driven by continued strength in Drug Compounding, partially offset by reduced sales within Injectables & Anesthesia.
Injectables and Anesthesia category sales totaled $352 million, down 8% year over year reportedly and down 9% on an operational basis. The Drug Compounding category sales amounted to $316 million, up 22% year over year reportedly and up 18% on an operational basis.
Other
Revenues in the segment amounted to $91 million, up 658% on a year-over-year basis.
Margin Analysis
Baxter reported an adjusted gross profit of $1.06 billion, down 13.9% year over year. As a percentage of revenues, the adjusted gross margin contracted 900 basis points (bps) to 35.5%.
Selling, general and administrative expenses amounted to $761 million, flat year over year. Research and development expenses totaled $126 million, down 40% on a year-over-year basis.
Adjusted operating income from continuing operations totaled $352 million, down 16% year over year. As a percentage of revenues, the adjusted operating margin contracted 340 bps to 11.8%.
2026 Guidance
Baxter issued its sales and EPS guidance for 2026.
Continuing operational sales are estimated to reflect flat to 1% growth on a reported basis. Sales are expected to be flat organically. The Zacks Consensus Estimate is pegged at $11.28 billion, implying 1.9% growth.
Adjusted EPS from continuing operations is projected to be in the band of $1.85-$2.05. The Zacks Consensus Estimate is pegged at $2.33.
Baxter International Inc. Price, Consensus and EPS Surprise
Some better-ranked stocks in the broader medical space that have announced quarterly results are DaVita Inc. (DVA - Free Report) , Intuitive Surgical (ISRG - Free Report) and Cardinal Health, Inc. (CAH - Free Report) .
DaVita reported fourth-quarter 2025 adjusted EPS of $3.40, which beat the Zacks Consensus Estimate by 5.1%. Revenues of $3.62 billion surpassed the Zacks Consensus Estimate by 2.7%. DVA currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
DaVita has a long-term estimated growth rate of 20.2%. DVA’s earnings surpassed estimates in three of the trailing four quarters and missed once, the average surprise being 1.2%.
Intuitive Surgical reported fourth-quarter 2025 adjusted EPS of $2.53, which beat the Zacks Consensus Estimate by 12.44%. Revenues of $2.87 billion surpassed the Zacks Consensus Estimate by 4.6%. ISRG currently sports a Zacks Rank of 1.
Intuitive Surgical has a long-term estimated growth rate of 15.7%. ISRG’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 13.24%.
Cardinal Health, carrying a Zacks Rank #2 (Buy) at present, reported second-quarter fiscal 2026 adjusted EPS of $2.63, which beat the Zacks Consensus Estimate by 9.9%. Revenues of $65.63 billion topped the consensus mark by 0.9%.
Cardinal Health has a long-term estimated growth rate of 15%. CAH’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 9.3%.
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BAX Stock Falls Following Q4 Earnings Miss, Margins Contract
Key Takeaways
Baxter International Inc. (BAX - Free Report) reported fourth-quarter 2025 adjusted earnings per share (EPS) from continuing operations of 44 cents, which missed the Zacks Consensus Estimate of 53 cents by 17%. The bottom line declined 24% from the year-ago quarter’s level.
On a GAAP basis, the company reported a loss per share from continuing operations of $2.19 compared with 95 cents in the prior-year quarter.
The company’s continuing operations exclude its Kidney Care business, which was acquired by Carlyle in January 2025.
Baxter’s Revenue Details
Revenues from continued operations totaled $2.97 billion, up 8% on a reported basis and 3% on an operational basis. The figure beat the Zacks Consensus Estimate by 6.5%.
U.S. sales from continuing operations were $1.55 billion, up 3% reportedly and down 1% on an operational basis. International sales from continuing operations totaled $1.42 billion, reflecting an increase of 14% on a reported basis and 8% on an operational basis.
Shares of BAX lost 13.3% in pre-market trading following lower-than-expected quarterly earnings. The company’s shares have lost 7.2% in the past six months compared with the industry’s decline of 11.6%. The broader S&P 500 Index has increased 9.6% in the same period.
Image Source: Zacks Investment Research
BAX’s Segmental Details
Medical Products & Therapies
The segment includes Advanced Surgery and Infusion Therapies & Technologies categories. Sales in this segment totaled $1.39 billion, up 6% reportedly and 4% on an operational basis. The growth was driven by increased sales within the Infusion Therapies & Technologies division, driven by strength in IV solutions and continued strong global demand for Advanced Surgery products. This growth was partially offset by reduced sales in infusion systems due to the previously disclosed shipment and installation hold of the Novum IQ LVP.
Infusion Therapies and Technologies’ sales totaled $1.06 billion, up 4% year over year reportedly and 1% on an operational basis. Advanced Surgery category sales amounted to $328 million, up 12% year over year reportedly and up 11% on an operational basis.
Healthcare Systems and Technologies
The segment includes the Front Line Care category. It also consists of the Patient Support Systems and Surgical Solutions categories, which are clubbed as Care & Connectivity Solutions. Total sales in this segment were $827 million, up 5% year over year reportedly up and 4% on an operational basis. The performance reflected continued demand for the Care & Connectivity Solutions division, along with growth in the Front Line Care.
Front Line Care category sales totaled $290 million, up 4% year over year reportedly and up 3% on an operational basis. Care & Connectivity Solutions category sales amounted to $537 million, up 7% year over year reportedly and up 4% on an operational basis.
Pharmaceuticals
The segment presently includes two product categories — Injectables & Anesthesia and Drug Compounding. Total sales during the fourth quarter were $668 million, up 4% year over year reportedly and up 2% on an operational basis. The growth was driven by continued strength in Drug Compounding, partially offset by reduced sales within Injectables & Anesthesia.
Injectables and Anesthesia category sales totaled $352 million, down 8% year over year reportedly and down 9% on an operational basis. The Drug Compounding category sales amounted to $316 million, up 22% year over year reportedly and up 18% on an operational basis.
Other
Revenues in the segment amounted to $91 million, up 658% on a year-over-year basis.
Margin Analysis
Baxter reported an adjusted gross profit of $1.06 billion, down 13.9% year over year. As a percentage of revenues, the adjusted gross margin contracted 900 basis points (bps) to 35.5%.
Selling, general and administrative expenses amounted to $761 million, flat year over year. Research and development expenses totaled $126 million, down 40% on a year-over-year basis.
Adjusted operating income from continuing operations totaled $352 million, down 16% year over year. As a percentage of revenues, the adjusted operating margin contracted 340 bps to 11.8%.
2026 Guidance
Baxter issued its sales and EPS guidance for 2026.
Continuing operational sales are estimated to reflect flat to 1% growth on a reported basis. Sales are expected to be flat organically. The Zacks Consensus Estimate is pegged at $11.28 billion, implying 1.9% growth.
Adjusted EPS from continuing operations is projected to be in the band of $1.85-$2.05. The Zacks Consensus Estimate is pegged at $2.33.
Baxter International Inc. Price, Consensus and EPS Surprise
Baxter International Inc. price-consensus-eps-surprise-chart | Baxter International Inc. Quote
Zacks Rank and Stocks to Consider
Currently, Baxter carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader medical space that have announced quarterly results are DaVita Inc. (DVA - Free Report) , Intuitive Surgical (ISRG - Free Report) and Cardinal Health, Inc. (CAH - Free Report) .
DaVita reported fourth-quarter 2025 adjusted EPS of $3.40, which beat the Zacks Consensus Estimate by 5.1%. Revenues of $3.62 billion surpassed the Zacks Consensus Estimate by 2.7%. DVA currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
DaVita has a long-term estimated growth rate of 20.2%. DVA’s earnings surpassed estimates in three of the trailing four quarters and missed once, the average surprise being 1.2%.
Intuitive Surgical reported fourth-quarter 2025 adjusted EPS of $2.53, which beat the Zacks Consensus Estimate by 12.44%. Revenues of $2.87 billion surpassed the Zacks Consensus Estimate by 4.6%. ISRG currently sports a Zacks Rank of 1.
Intuitive Surgical has a long-term estimated growth rate of 15.7%. ISRG’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 13.24%.
Cardinal Health, carrying a Zacks Rank #2 (Buy) at present, reported second-quarter fiscal 2026 adjusted EPS of $2.63, which beat the Zacks Consensus Estimate by 9.9%. Revenues of $65.63 billion topped the consensus mark by 0.9%.
Cardinal Health has a long-term estimated growth rate of 15%. CAH’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 9.3%.