Baxter’s third quarter results were met with a negative market reaction, as the company delivered top-line growth but missed Wall Street’s revenue expectations. Management attributed performance shortfalls primarily to ongoing challenges in its Infusion Therapies & Technologies division, which faced a continued pause on Novum IQ Large Volume pump shipments, and to softness in U.S. demand for IV solutions. CEO Andrew Hider candidly stated, “We are not satisfied with our current performance,” emphasizing that operational and segment-specific headwinds required immediate attention. The Healthcare Systems & Technologies segment, however, demonstrated improved performance during the quarter.
Is now the time to buy BAX? Find out in our full research report (it’s free for active Edge members).
Baxter (BAX) Q3 CY2025 Highlights:
- Revenue: $2.84 billion vs analyst estimates of $2.88 billion (5% year-on-year growth, 1.4% miss)
- Adjusted EPS: $0.69 vs analyst estimates of $0.60 (15.4% beat)
- Adjusted EBITDA: $660 million vs analyst estimates of $532.7 million (23.3% margin, 23.9% beat)
- Revenue Guidance for Q4 CY2025 is $2.81 billion at the midpoint, below analyst estimates of $3.00 billion
- Management lowered its full-year Adjusted EPS guidance to $2.38 at the midpoint, a 3.8% decrease
- Operating Margin: 6.1%, in line with the same quarter last year
- Constant Currency Revenue rose 4% year on year, in line with the same quarter last year
- Market Capitalization: $9.23 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Baxter’s Q3 Earnings Call
- Robert Marcus (JPMorgan) asked about CEO Andrew Hider’s vision for Baxter and how the company can return to growth. Hider emphasized a focus on stabilizing underperforming business lines, strengthening the balance sheet, and implementing a culture of continuous improvement, but did not provide specific 2026 guidance.
- David Roman (Goldman Sachs) inquired about Baxter’s business identity and the implications of growth in lower-margin segments. Hider said the company’s long-term strategy will be clarified at a 2026 Investor Day, while CFO Joel Grade highlighted Advanced Surgery as a positive mix offset and noted that forward guidance reflects volume and product mix challenges.
- Travis Steed (BofA Securities) sought details on the extended Novum pump shipment hold and its impact on guidance. Hider confirmed that the hold will likely continue into next year, leading to customer transitions, and said timing of resolution remains uncertain.
- Larry Biegelsen (Wells Fargo) questioned how Hider’s non-medical device background will inform his leadership at Baxter. Hider cited his experience driving continuous improvement across several businesses and stressed the importance of empowering teams at all levels.
- Joanne Wuensch (Citi) asked about the persistence of IV fluid conservation and potential changes in hospital capital spending. Hider explained that hospital purchasing patterns still prioritize fluid conservation, and Grade noted that hospital capital expenditure demand remains robust based on recent order trends.
Catalysts in Upcoming Quarters
In the coming quarters, the StockStory team will watch for (1) progress in resolving the Novum IQ pump shipment hold and customer retention within the infusion portfolio, (2) signs of demand normalization for U.S. IV solutions as hospitals adjust purchasing patterns, and (3) execution of cost reduction and deleveraging initiatives, including the impact of the reduced dividend on free cash flow. The pace of recovery in key business lines and updates on long-term strategy will also be important indicators.
Baxter currently trades at $17.89, down from $22.42 just before the earnings. At this price, is it a buy or sell? Find out in our full research report (it’s free for active Edge members).
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