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Baxter reported Q1 EPS of 36 cents, beating estimates, though earnings fell 35% year over year.
BAX posted 3% revenue growth, with international sales up 12% but U.S. sales down 4%.
BAX saw margins contract sharply, with gross margin down 500 bps and operating margin down 390 bps.
Baxter International Inc. (BAX - Free Report) reported first-quarter 2026 adjusted earnings per share (EPS) from continuing operations of 36 cents, which beat the Zacks Consensus Estimate of 31 cents by 16.1%. The bottom line declined 35% from the year-ago quarter’s level.
On a GAAP basis, the company reported a loss per share from continuing operations of 3 cents against EPS of 13 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 $2.7 billion, up 3% on a reported basis but declined 1% on an organic basis. The figure beat the Zacks Consensus Estimate by 3.8%.
U.S. sales from continuing operations were $1.44 billion, down 4% on a reported as well as an organic basis. International sales from continuing operations totaled $1.27 billion, reflecting an increase of 12% on a reported basis and 3% on an organic basis.
Shares of BAX gained 6.5% in pre-market trading following better-than-expected quarterly earnings. The company’s shares have declined 11.5% so far this year compared with the industry’s fall of 21.5%. The broader S&P 500 Index has increased 4.5% 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 $1.29 billion, up 2% reportedly but down 2% on an organic basis. The decline was led by lower infusion pump sales due to the previously disclosed shipment and installation hold of the Novum IQ LVP. Moreover, distributor increased their stock amid Hurricane Helene disruption last year, leading to unfavorable comparisons. The decline was partially offset by continued strong global demand for Advanced Surgery products.
Infusion Therapies and Technologies’ sales totaled $981 million, down 1% year over year, reportedly and 5% on an organic basis. Advanced Surgery category sales amounted to $304 million, up 13% year over year reportedly and 10% on an organic 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 $705 million, flat year over year reportedly and down 2% on an organic basis. The performance reflected reduced sales within the Front Line Care division, driven by the timing of orders and the impact of planned global portfolio exits.
Front Line Care category sales totaled $290 million, down 3% year over year, reportedly and 4% on an organic basis. Care & Connectivity Solutions category sales amounted to $537 million, up 2% year over year, reportedly and flat on an organic basis.
Pharmaceuticals
The segment presently includes two product categories — Injectables & Anesthesia and Drug Compounding. Total sales during the first quarter were $621 million, up 7% year over year reportedly and 1% on an organic 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 $301 million, down 10% year over year reportedly and 13% on an organic basis. The Drug Compounding category sales amounted to $320 million, up 30% year over year reportedly and 20% on an organic basis.
Other
Revenues in the segment amounted to $51 million, up 15% year over year reportedly.
Margin Analysis
Baxter reported an adjusted gross profit of $993 million, down 18.9% year over year. As a percentage of revenues, the adjusted gross margin contracted 500 basis points (bps) to 36.8%.
Selling, general and administrative expenses amounted to $728 million, up 4% year over year. Research and development expenses totaled $139 million, down 1%.
Adjusted operating income from continuing operations totaled $188 million, down 34% year over year. As a percentage of revenues, the adjusted operating margin contracted 390 bps to 7%.
2026 Guidance
Baxter maintained 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 $11.33 billion, implying 0.8% 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 $1.9.
Baxter International Inc. Price, Consensus and EPS Surprise
Globus Medical shares have gained 4% in the year-to-date period. Estimates for the company’s first-quarter 2026 EPS have increased 1 cent to 90 cents in the past 30 days. GMED’s earnings beat estimates in three of the trailing four quarters and missed once, delivering an average surprise of 18.79%. In the last reported quarter, it posted an earnings surprise of 20.75%.
Estimates for Phibro Animal Health’s third-quarter fiscal 2026 EPS have remained constant at 72 cents in the past 30 days. Shares of the company have risen 45.3% in the year-to-date period against the industry’s 18.8% decline. PAHC’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 20.15%. In the last reported quarter, it delivered an earnings surprise of 26.09%.
Cardinal Health shares have remained flat in the year-to-date period. Estimates for the company’s third-quarter 2026 EPS have decreased 1 cent to $2.80 in the past 30 days. CAH’s earnings beat estimates in each of the trailing four quarters, delivering an average surprise of 9.30%. In the last reported quarter, it posted an earnings surprise of 10.04%.
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BAX Stock Gains on Q1 Earnings & Sales Beat, Margins Contract
Key Takeaways
Baxter International Inc. (BAX - Free Report) reported first-quarter 2026 adjusted earnings per share (EPS) from continuing operations of 36 cents, which beat the Zacks Consensus Estimate of 31 cents by 16.1%. The bottom line declined 35% from the year-ago quarter’s level.
On a GAAP basis, the company reported a loss per share from continuing operations of 3 cents against EPS of 13 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 $2.7 billion, up 3% on a reported basis but declined 1% on an organic basis. The figure beat the Zacks Consensus Estimate by 3.8%.
U.S. sales from continuing operations were $1.44 billion, down 4% on a reported as well as an organic basis. International sales from continuing operations totaled $1.27 billion, reflecting an increase of 12% on a reported basis and 3% on an organic basis.
Shares of BAX gained 6.5% in pre-market trading following better-than-expected quarterly earnings. The company’s shares have declined 11.5% so far this year compared with the industry’s fall of 21.5%. The broader S&P 500 Index has increased 4.5% 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 $1.29 billion, up 2% reportedly but down 2% on an organic basis. The decline was led by lower infusion pump sales due to the previously disclosed shipment and installation hold of the Novum IQ LVP. Moreover, distributor increased their stock amid Hurricane Helene disruption last year, leading to unfavorable comparisons. The decline was partially offset by continued strong global demand for Advanced Surgery products.
Infusion Therapies and Technologies’ sales totaled $981 million, down 1% year over year, reportedly and 5% on an organic basis. Advanced Surgery category sales amounted to $304 million, up 13% year over year reportedly and 10% on an organic 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 $705 million, flat year over year reportedly and down 2% on an organic basis. The performance reflected reduced sales within the Front Line Care division, driven by the timing of orders and the impact of planned global portfolio exits.
Front Line Care category sales totaled $290 million, down 3% year over year, reportedly and 4% on an organic basis. Care & Connectivity Solutions category sales amounted to $537 million, up 2% year over year, reportedly and flat on an organic basis.
Pharmaceuticals
The segment presently includes two product categories — Injectables & Anesthesia and Drug Compounding. Total sales during the first quarter were $621 million, up 7% year over year reportedly and 1% on an organic 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 $301 million, down 10% year over year reportedly and 13% on an organic basis. The Drug Compounding category sales amounted to $320 million, up 30% year over year reportedly and 20% on an organic basis.
Other
Revenues in the segment amounted to $51 million, up 15% year over year reportedly.
Margin Analysis
Baxter reported an adjusted gross profit of $993 million, down 18.9% year over year. As a percentage of revenues, the adjusted gross margin contracted 500 basis points (bps) to 36.8%.
Selling, general and administrative expenses amounted to $728 million, up 4% year over year. Research and development expenses totaled $139 million, down 1%.
Adjusted operating income from continuing operations totaled $188 million, down 34% year over year. As a percentage of revenues, the adjusted operating margin contracted 390 bps to 7%.
2026 Guidance
Baxter maintained 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 $11.33 billion, implying 0.8% 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 $1.9.
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 #4 (Sell).
Some better-ranked stocks in the broader medical space are Globus Medical (GMED - Free Report) , Phibro Animal Health (PAHC - Free Report) and Cardinal Health (CAH - Free Report) . While Globus Medical sports a Zacks Rank #1 (Strong Buy), Phibro Animal Health and Cardinal Health carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Globus Medical shares have gained 4% in the year-to-date period. Estimates for the company’s first-quarter 2026 EPS have increased 1 cent to 90 cents in the past 30 days. GMED’s earnings beat estimates in three of the trailing four quarters and missed once, delivering an average surprise of 18.79%. In the last reported quarter, it posted an earnings surprise of 20.75%.
Estimates for Phibro Animal Health’s third-quarter fiscal 2026 EPS have remained constant at 72 cents in the past 30 days. Shares of the company have risen 45.3% in the year-to-date period against the industry’s 18.8% decline. PAHC’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 20.15%. In the last reported quarter, it delivered an earnings surprise of 26.09%.
Cardinal Health shares have remained flat in the year-to-date period. Estimates for the company’s third-quarter 2026 EPS have decreased 1 cent to $2.80 in the past 30 days. CAH’s earnings beat estimates in each of the trailing four quarters, delivering an average surprise of 9.30%. In the last reported quarter, it posted an earnings surprise of 10.04%.