Today we'll discuss Baxter's third quarter 2025 results along with an update to our full year 2025 outlook and newly issued fourth quarter 2025 guidance. This morning, a press release was issued with our preliminary earnings results and updated outlook. I am pleased to be here for my first earnings call as CEO and look forward to getting to know everyone here better as the quarters progress. This is a business whose portfolio has proven resilient over its almost 100 year history, one that has delivered significant revenues and attractive operating margins and generated solid cash flow over the years.
These results reflect challenges in two divisions, the Infusion Therapies and Technologies division within the Medical Products & Therapies segment and the Injectables and Anesthesia division within the Pharmaceuticals segment. Of course, there have been challenges in certain areas that have hampered growth and consistent execution, and we expect our growth algorithm to continue to be pressured in the near-term. The Spectrum IQ LVP now operates on a shared gateway with Novum IQ Syringe, creating a cohesive user experience and is built for the future with EMR interoperability, enhanced software, and innovative analytical capabilities. It is from the basis of a strong balance sheet that we will be better able to invest in the business, support innovation, and deliver and return increased value to our shareholders.
This means focusing on improved cash flow and taking a consistent approach to our capital allocation objective. It is in this context that we and the Board intend to reduce the quarterly dividend to $0.01 per share, beginning with the dividend to be paid in January 2026. Earlier this month we rolled out Baxter GPS, our new growth and performance system aimed at driving continuous improvement and a growth and performance mindset. On the bottom line, total company adjusted earnings from continuing operations were $0.69 per share.
| Metric | Period | Current guidance |
|---|---|---|
| Quarterly dividend | Beginning January 2026 payment | $0.01 per share (Reduced to free up cash to accelerate deleveraging) |
| Novum IQ LVP shipment/installation hold | Beyond 2025 | Hold expected to remain in place beyond year-end; no specific lift timing committed (Extended) |
| Q4 / FY2025 outlook | Q4 and FY2025 | Updated outlook reflects continued infusion pump pressure, IV Solutions softness, and premix softness (Lowered top line) |
| Metric | YoY | Note |
|---|---|---|
| Total continuing operations sales | +5% reported, +2% operational | Growth across nearly all divisions, partly offset by ITT and premix softness |
| MPT segment sales | -1% operational | Softness in Infusion Therapies and Technologies, slightly offset by strong Advanced Surgery demand |
| ITT division sales | -4% | Lower infusion pump sales from the Novum LVP ship/install hold and ongoing post-Hurricane Helene fluid conservation in U.S. Hospital IV Solutions |
| Advanced Surgery sales | +11% | Solid demand for hemostats and sealants, strong commercial execution, steady procedure volumes |
| HST segment sales | +2% | CCS growth driven by Surgical Solutions, Patient Support Systems, and Care Communications; Frontline Care up 1% on cardiology demand |
| HST adjusted operating margin | -460 bps to 13.5% | Higher tariff costs, increased R&D investment, and increased corporate allocation expenses post Kidney Care sale, partly offset by TSA income |
| MPT adjusted operating margin | +50 bps to 20.5% | Positive pricing, partly offset by lower sales volumes and higher manufacturing and supply costs |
| Pharmaceuticals segment sales | +7% | High single-digit Anesthesia growth and favorable injectables comparison versus prior-year supply constraints |
| Topic | Previous mention | Current period | Trend |
|---|---|---|---|
| Novum IQ LVP shipment/installation hold | Previously discussed hold | Hold expected beyond year-end; customers evaluating alternatives, some returning or switching to Spectrum IQ; no committed lift timing | Worsening / prolonged |
| Post-Hurricane Helene IV fluid conservation | Prior conservation discussed | Demand still below pre-Helene levels; recovery slower than expected; some conservation likely to persist into 2026 | Persistent / slower recovery |
| Premix product softness / IV push shift | Discussed last quarter | Continued softness from IV infusion protocol changes and increased IV push use in U.S. hospitals | Continuing |
| Balance sheet deleveraging and capital allocation | Prior deleveraging commitments | Dividend cut to $0.01 to accelerate deleveraging; M&A limited to future fold-in/tuck-in opportunities | Intensifying focus |
| Continuous improvement culture (Baxter GPS) | — | Newly launched growth and performance system to drive efficiency and accountability | New initiative |
| Hospital capital spending | — | No slowdown observed; CCS U.S. capital orders up 30% year over year despite macro uncertainty | Stable / robust |