Baxter International Inc.

What they do

Baxter develops, manufactures, and sells a broad range of products, digital health solutions, and therapies used in hospitals, nursing homes, rehabilitation centers, ambulatory surgery centers, doctors' offices, and at home. The company operates in over 100 countries and is organized into three reportable segments. Its product portfolio includes IV solutions, infusion pumps, advanced surgery products, care connectivity solutions, and pharmaceutical products.

Revenue drivers

• Medical Products & Therapies — Largest segment with Q2 2026 sales of approximately $2.1 billion, up 7% reported, driven by Infusion Therapies Platforms (Drug Compounding, IV Solutions) and Advanced Surgery, partially offset by Infusion Systems and Injectables.
• Healthcare Systems & Technologies — Q2 2026 sales of approximately $801 million, up 4%, driven by strong demand for Care Connectivity Solutions (Patient Support Systems) and Front Line Care.
• Pharmaceuticals (now within Infusion Therapies Platforms) — Formerly a separate segment, now reported under Medical Products & Therapies; contributes to overall ITP growth, though specifics are not separately broken out in the latest release.

Recent performance

Second-quarter 2026 worldwide sales were $2.96 billion, up 5% on both reported and organic basis, with U.S. sales up 4% and international sales up 7%. U.S. GAAP net income was $135 million, or $0.26 per diluted share; adjusted EPS was $0.56, down 5% from prior year. Free cash flow was $181 million in Q2, bringing first-half free cash flow to $257 million. Full-year 2025 revenue was $11.24 billion with a net loss of $957 million, reflecting special items and recall-related charges.

Strategy

Baxter is focused on strengthening the balance sheet and reducing net leverage, having repaid $3.81 billion of legacy debt in 2025 using proceeds from the Kidney Care sale. The company is implementing restructuring actions to adjust its cost structure post-divestiture. Capital expenditures of $513 million in 2025 were directed toward production efficiency, quality systems, and manufacturing capacity. Management emphasizes the Baxter Growth and Performance System (GPS) to stabilize operations and drive continuous improvement.

Risks

• Novum IQ LVP recall and hold — Voluntary corrections and FDA Class I recalls for the Novum LVP have led to a temporary stop in U.S. and Canada distribution and installation, with no meaningful sales expected while holds remain.
• Tariff exposure — Global tariffs, including potential medical device and pharmaceutical tariffs, have adversely affected results and are expected to continue to do so, despite mitigation efforts.
• Hurricane Helene aftermath — The September 2024 hurricane damaged the North Cove facility and prompted customer fluid conservation practices, reducing demand in the IV solutions business.
• Post-divestiture dis-synergies — The sale of the Kidney Care business reduced company size, resulting in additional dis-synergies that require restructuring actions to align cost structure.

Outlook

Management raised the full-year 2026 financial outlook following Q2 results that exceeded expectations. The company expects continued negative impact from tariffs but is implementing select offsets. Timing of the Novum LVP ship and installation hold remains uncertain, with no meaningful sales expected during the hold. Free cash flow in the first half was $257 million, and management continues to focus on debt reduction.