Baxter International Inc. (NYSE:BAX) on Thursday reported better-than-expected third-quarter financial results and raised its fiscal 2026 guidance.
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The hospital product maker reported adjusted earnings of 58 cents, beating the consensus of 52 cents.
Sales increased 5% to $2.976 billion, beating the consensus of $2.908 billion, driven by growth in Advanced Surgery, Drug Compounding, and Infusion Systems.
Segment Overview
Medical Products & Therapies: Sales totaled approximately $2.1 billion, increasing 6% on both a reported and organic basis, reflecting strength within the Infusion Therapies & Platforms division, driven primarily by Infusion Systems, Drug Compounding and IV Solutions.
The growth was partially offset by reduced sales within Injectables. Continued strong global demand for Advanced Surgery products also contributed to performance.
Healthcare Systems & Technologies: Sales reached approximately $806 million, increasing 4%, reflecting strong demand for Care & Connectivity Solutions products, driven by growth in Global Surgical Solutions and Patient Support Systems.
Results also reflected growth in Front Line Care.
Demand and Market Conditions
Andrew Hider, president and CEO, in an investor earnings call, said, “End-market demand remained generally steady during the quarter, with continued strength in Advanced Surgery and a healthy order book in Care and Connectivity Solutions, or CCS. We continue to closely monitor the external environment, including macroeconomic uncertainty.”
Baxter will discontinue cephalosporin production at its Round Lake, Illinois, specialty injectables facility, a move it said is not expected to cause market shortages.
The facility will focus exclusively on non-cephalosporin products, simplifying operations and supporting supply continuity.
The decision also addresses some operational complexities cited in an FDA warning letter following an inspection earlier this year.
Fiscal 2026 Guidance Raised
Baxter raised its fiscal 2026 FY2026 adjusted earnings guidance from $1.95-$2.15 per share to $2.05-$2.15 per share, compared to Wall Street estimates of $2.05
The company also raised its 2026 sales guidance from $11.581 billion-$11.694 billion to $11.694 billion-$11.806 billion compared to analysts’ estimate of $11.619 billion.
The company raised its full-year outlook for organic sales growth to 3%-4%, reflecting strong performance and confidence in ongoing strategic initiatives.
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Margin Headwinds in 2027
When asked about margin headwinds in 2027, CFO John Rogers said, “…there are clearly some margin headwinds. There are also some margin tailwinds, and we’ve got good visibility of cost-saving opportunities in the business. You know, I’ve been very impressed actually with the level of detail and the rigor and the discipline that the organization is already deploying in driving efficiencies through the business. So, like in any situation, there are puts and takes and that is the case for 2027.”
BAX Price Action: Baxter International shares were down 4.75% at $24.24 at the time of publication on Thursday, according to Benzinga Pro data.
Photo via Shutterstock
