Baxter International (BAX) Q1 2026 earnings summary

Executive summary

• First-quarter 2026 sales from continuing operations were $2.7 billion, up 3% reported but down 1% organically, with results excluding the divested Kidney Care business.

• Adjusted EPS was $0.36, down 35% year-over-year, reflecting higher costs, tough comps, and special items; net loss attributable to stockholders was $(15) million.

• The company is in early stages of a turnaround, focusing on stabilizing operations, strengthening the balance sheet, and driving continuous improvement.

• Innovation and new product launches, including the IV Verify Line Labeling System and AI-enabled solutions, are key to future growth.

• Completed sale of Kidney Care segment in January 2025, generating $3.2 billion after-tax proceeds used to repay debt.

Financial highlights

• Q1 2026 worldwide sales from continuing operations were $2.7B, up 3% reported but down 1% organically year-over-year; U.S. sales declined 4%, international sales rose 12%.

• Adjusted operating margin was 11%, down 390 basis points year-over-year due to cost headwinds and unfavorable comps; adjusted gross margin was 36.8%, down 500 basis points.

• Free cash flow improved to $76 million from negative $221 million in Q1 2025, reflecting better working capital management.

• Net interest and other expense totaled $67 million; adjusted tax rate was 18.3%.

• Special items adversely impacted net income by $205 million ($0.40 per share).

Outlook and guidance

• Full-year 2026 reported sales growth expected to be flat to up 1%; organic sales growth expected to be flat.

• Adjusted EPS guidance for 2026 reiterated at $1.85–$2.05.

• Adjusted operating margin expected between 13%–14% for the year; adjusted tax rate at 18.5%–19.5%.

• Second half of 2026 expected to show improvement in sales, margins, and earnings due to seasonality, cost actions, and inventory normalization.

• No meaningful sales of Novum LVP anticipated until shipment hold is lifted; Spectrum IQ pump remains available.