Baxter International Inc. (NYSE:BAX) reported better-than-expected first-quarter earnings on Thursday and reaffirmed its fiscal 2026 guidance.
Earnings Beat, But Profit Declines On Cost Pressures
The hospital care product maker reported its first quarter adjusted earnings of 36 cents per share, beating the consensus of 31 cents.
Earnings fell 35% due to the expected unfavorable comparison to the prior year, which benefited from a timing shift in expense recognition related to an updated estimate, which resulted in the reclassification of certain functional costs from SG&A to cost of sales.
Additionally, higher costs related to tariffs and higher manufacturing costs, including lower absorption, impacted results in the quarter.
Sales of $2.7 billion beat the Wall Street estimate of $2.62 billion, increasing 3% on a reported basis and declining 1% on an organic basis.
Segment Performance Mixed Across Portfolio
Medical Products & Therapies sales were approximately $1.3 billion, increasing 2% on a reported basis and declining 2% on an organic basis.
The segment’s performance was impacted by weaker sales in the Infusion Therapies & Technologies segment, primarily due to reduced infusion pump volumes tied to the previously disclosed shipment and installation hold on the Novum IQ LVP.
Results also faced a tough year-over-year comparison, as the prior period benefited from a one-time distributor build following Hurricane Helene. Strength in global demand for Advanced Surgery products partially mitigated the decline.
Healthcare Systems & Technologies sales were $705 million, remaining flat on a reported basis and declining 2% on an organic basis.
Performance in the quarter reflected reduced sales within the Front Line Care division, driven by the timing of orders and the impact of planned global portfolio exits.
Sales in the Care & Connectivity Solutions division were approximately flat.
Pharmaceutical sales reached $621 million, increasing 7% on a reported basis and 1% on an organic basis.
Performance in the quarter reflected continued strength in Drug Compounding, which was partially offset by reduced sales within Injectables & Anesthesia.
Guidance Reaffirmed Despite Operational Challenges
Baxter reiterated its fiscal 2026 adjusted earnings guidance of $1.85-$2.05 compared to the consensus of $1.91.
The company also reaffirmed its annual sales guidance of $11.24 billion-$11.36 billion compared to the consensus of $11.35 billion.
BAX Technical Outlook: Key Levels And Momentum
Baxter is currently trading within a challenging technical setup, positioned 6.7% below its 100-day simple moving average (SMA) and 2.4% below its 50-day SMA, indicating a bearish trend in the intermediate term.
The stock is also trading 0.1% below its 20-day SMA, suggesting short-term weakness as it struggles to maintain upward momentum.
The relative strength index (RSI) is at 39.97, indicating neutral momentum and suggesting that the stock is neither overbought nor oversold at this time. This positioning implies a potential for further price movement as traders assess the stock’s next direction.
- Key Resistance: $19.00 — A level where selling pressure may increase.
- Key Support: $15.50 — A critical level that could attract buying interest.
Baxter’s 12-month performance shows a decline of 43.09%, reflecting significant challenges over the past year.
BAX Price Action: Baxter International shares were down 0.80% at $17.44 during premarket trading on Friday, according to Benzinga Pro data.
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