Baxter International Inc. BAX reported first-quarter 2025 adjusted earnings per share (EPS) of 55 cents, which beat the Zacks Consensus Estimate of 48 cents by 14.6%. The bottom line improved 52.8% from the year-ago quarter’s level. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)
On a GAAP basis, the company reported EPS of 13 cents compared with EPS of a cent in the prior-year quarter.
Baxter’s Revenue Details
Revenues from continued operations totaled $2.63 billion, up 5.4% on a reported and operational basis. The figure beat the Zacks Consensus Estimate by 2.3%.
Shares of BAX gained 3.7% in pre-market trading following better-than-expected quarterly results. The company’s shares have gained 6.9% in the year-to-date period compared with the industry’s growth of 4.3%. The broader S&P 500 Index decreased 5.7% in the same period.
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BAX’s Segmental Details
Baxter completed its transformation plan, announced in February 2023, with the sale of its Kidney Care business last month. The company expects its streamlined businesses to offer new opportunities to redefine healthcare delivery and drive profitable growth.
As part of its transformation plan, Baxter established its new operating model, integrating its prior matrixed structure of nine businesses (operating across three geographic regions) into the aforementioned four verticalized global segments. The company started reporting under a new model in the third quarter of 2023.
Medical Products & Therapies
The segment includes Advanced Surgery and a new category, Infusion Therapies & Technologies. Total sales in this segment totaled $1.26 billion, up 3% year over year reportedly and 6% on an operational basis. Growth in the quarter reflected strength in the Infusion Therapies & Technologies division, driven by strong demand for IV infusion pumps and nutrition therapies, particularly in the United States and solid performance in the Advanced Surgery division, driven by robust growth internationally.
Infusion Therapies and Technologies’ sales totaled $994 million, up 3% year over year reportedly and 6% on an operational basis. Advanced Surgery category sales amounted to $268 million, up 2% year over year reportedly and 4% 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 $704 million, up 6% year over year reportedly and on an operational basis. Growth was driven by robust U.S. sales of Patient Support Systems products in the Care and Connectivity Solutions division. The Front Line Care division also performed well, benefiting from both a favorable comparison to the previous year and continued stabilization in the U.S. primary care market.
Front Line Care category sales totaled $277 million, up 5% year over year reportedly as well as on an operational basis. Care & Connectivity Solutions category sales amounted to $427 million, up 6% year over year reportedly and 7% on an operational basis.
Pharmaceuticals
The segment presently includes two product categories — Injectables & Anesthesia and Drug Compounding. Total sales during the first quarter were $581 million, up 1% year over year reportedly and 3% on an operational basis. The strong quarterly performance was primarily due to mid-single-digit global growth in specialty injectables, though this was partially offset by a slight decline in anesthesia and modest growth in Drug Compounding, which faced tough comparisons to the same period last year.
Injectables and Anesthesia category sales totaled $335 million, up 2% year over year reportedly and 4% on an operational basis. The Drug Compounding category sales amounted to $246 million, down 2% year over year reportedly but up 2% on an operational basis.
Other
Revenues in the segment amounted to $78 million, up 388% on a year-over-year basis.
Margin Analysis
Baxter reported an adjusted gross profit of $1.09 billion, up 1.7% year over year. As a percentage of revenues, the adjusted gross margin contracted 160 basis points (bps) to 41.8%.
Selling, general and administrative expenses amounted to $703 million, down 3.6% from the year-ago quarter’s figure. Research and development expenses totaled $140 million, up 16.7% on a year-over-year basis.
Adjusted operating income from continuing operations totaled $285 million, up 55.7% year over year. As a percentage of revenues, the adjusted operating margin improved 360 bps to 10.9%.
2025 Guidance
Baxter issued and updated its guidance for the second quarter and full-year 2025, respectively.
For the second quarter, Baxter anticipates sales from continuing operations to grow 4-5% reportedly and 1-2% on an operational basis. The adjusted EPS for the period is expected to be in the range of 59-63 cents. The Zacks Consensus Estimate for sales and EPS is pegged at $2.80 billion and 61 cents, respectively.
For full-year 2025, continuing operational sales growth is now expected to be 7-8% reportedly and 4-5% on an operational basis. The Zacks Consensus Estimate for the metric is pegged at $11.14 billion, implying a year-over-year decline of 13.3% reportedly. Adjusted EPS is now projected to be in the band of $2.47-$2.55 compared with previous guidance of $2.45- $2.55. The Zacks Consensus Estimate is pegged at $2.48.
Baxter International Inc. Price, Consensus and EPS Surprise
Baxter International Inc. Price, Consensus and EPS Surprise
Baxter International Inc. price-consensus-eps-surprise-chart | Baxter International Inc. Quote
Our Take
Baxter exited the first quarter on a strong note, with both earnings and sales beating estimates. The expansion of adjusted operating margin bodes well for the stock, although adjusted gross margin witnessed a decline.
Baxter has made a significant leap in healthcare communication technology with the introduction of the Voalte Linq device, powered by its voice-activated Scotty assistant. This innovative, wearable badge is lightweight and designed to enhance efficiency and coordination among care teams in clinical settings. By enabling real-time, voice-driven communication, Voalte Linq streamlines workflow and reduces the need for manual input, which can often be a distraction in high-stress environments. Notably, it seamlessly integrates with Baxter’s existing digital solutions, such as Voalte Mobile and Voalte Nurse Call, creating a unified communication ecosystem that supports faster response times and improved patient outcomes.
Another key milestone is the launch of Hemopatch Sealing Hemostat with room temperature storage in several European markets. This product advancement is particularly impactful in surgical settings, where speed and accessibility are critical. Previously requiring cold storage, the updated Hemopatch can now be stored at room temperature, allowing for easier handling and quicker access during procedures. This improvement supports surgeons with a readily available tool for managing bleeding and leakage, enhancing surgical efficiency and potentially reducing complications during critical moments in the operating room.
Zacks Rank and Stocks to Consider
Currently, Baxter carries a Zacks Rank #3 (Hold).
Some better-ranked stocks from the same medical industry are Fresenius Medical Care FMS, Masimo MASI and AdaptHealth AHCO.
Fresenius Medical, carrying a Zacks Rank #2 (Buy) at present, has an estimated growth rate of 28.9% for 2025. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
FMS’ earnings beat estimates in three of the trailing four quarters and met in one, delivering an average surprise of 15.67%. The company is expected to release first-quarter results next month.
FMS’ shares have gained 10.3% so far this year.
Masimo, carrying a Zacks Rank of 2 at present, has an estimated growth rate of 20% for 2025.
MASI’s earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 14.41%. Its shares have risen 58.5% compared with the industry’s 3.9% growth year to date. The company is expected to release first-quarter results in May.
MASI’s shares have lost 1.3% so far this year.
AdaptHealth, carrying a Zacks Rank #2 at present, has an estimated earnings growth rate of 16.7% for 2025. The company’s earnings beat estimates in three of the trailing four quarters and missed in one, delivering a negative average surprise of 4.17%. The company is expected to release first-quarter results next month.
AHCO's shares have lost 12.1% so far this year.
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