Today, we'll discuss Baxter's first quarter results along with our financial outlook for the full year 2026. This morning, a press release was issued with our preliminary earnings results and reiterated outlook. During the call, we will be making forward-looking statements, including comments regarding our reiterated financial outlook for the full year 2026, and the anticipated drivers of the second quarter and second half 2026 performance. On the call, we will reference organic growth, which excludes the impact of foreign exchange, MSA revenues from Vantive, and impacts associated with business acquisitions or divestitures.
For the first quarter, financial results were in line with our overall expectations, and we are on track to deliver on our guidance for the full year. First quarter global sales from continuing operations totaled $2.7 billion, representing an increase of 3% year-over-year on a reported basis, and a decline of 1% on an organic basis. Adjusted earnings from continuing operations for the quarter were $0.36 per diluted share versus $0.55 in the prior year period. In the first quarter of 2025, we saw a one-time distributor build following Hurricane Helene, which benefited the MPT segment.
In the quarter, we saw the expected headwinds from both tariffs and higher manufacturing costs, including absorption pressure operating margin. While we did not see material impact from Novum LVP related returns in the quarter, we believe it's prudent to continue to factor this possibility into our full year guidance. We continue to work diligently to finalize hardware and software corrections to resolve the active field actions. Looking at the overall demand environment, we continue to believe we are in attractive end markets.
| Metric | Period | Current guidance |
|---|---|---|
| Organic sales growth | FY2026 | approximately flat (Reiterated) |
| Sales/EPS cadence | FY2026 | First half pressured year-over-year; growth weighted to the second half (Reiterated) |
| HST segment growth | FY2026 | Low single digits, back-half weighted (Reiterated) |
| Q2 top line | Q2 2026 | Sequential improvement vs Q1 but still pressured year-over-year (New) |
| Novum LVP | FY2026 | Guidance assumes the ship-and-installation hold remains in place all year and factors in possible returns (Reiterated) |
| Sales and earnings growth | FY2027 | Modest sales growth and modest earnings growth expected (no formal guidance) (New (preliminary)) |
| Metric | YoY | Note |
|---|---|---|
| Total sales | +3% reported, -1% organic ($2.7B) | Difficult prior-year comps including a one-time Hurricane Helene distributor build and a prior-year cost-timing benefit; tariffs and higher manufacturing costs |
| Adjusted EPS | -35% ($0.36 vs $0.55) | Unfavorable comparison to a ~$50M prior-year expense-timing benefit, plus tariffs and higher manufacturing costs including lower absorption |
| Advanced Surgery | +10% ($304M) | Strong demand and higher volumes for hemostats and sealants, strong commercial execution, steady procedure volumes |
| Infusion Therapies & Technologies | -5% ($981M) | Lower Novum LVP pump sales from the ship/installation hold and an unfavorable comp to a one-time IV solutions distributor build |
| Injectables & anesthesia | -13% ($301M) | Supply constraints including a contract-manufacturer disruption, softness in pre-mixed products, and a low-double-digit decline in inhaled anesthesia |
| Drug Compounding | +20% | Continued strong demand for compounding services |
| HST segment | -2% ($705M) | Front Line Care decline from order timing and planned portfolio exits; CCS flat |
| Pharmaceuticals segment | +1% ($621M) | Compounding growth offset by injectables/anesthesia weakness |
| Free cash flow | $76M vs -$221M | Improved versus the prior-year first quarter |
| Topic | Previous mention | Current period | Trend |
|---|---|---|---|
| Turnaround / Baxter GPS | — | Stabilizing the business, strengthening the balance sheet, and continuous improvement; 230+ events in Q1 | Progressing |
| Novum LVP ship-and-installation hold | Risk of customer returns flagged | No material return impact yet; corrections still being finalized; hold assumed in place all year | Stable |
| Tariffs and manufacturing cost / absorption pressure | Anticipated headwind | Expected headwinds materialized, pressuring gross and operating margins | Worsening |
| Injectables supply constraints | Operations challenge flagged last quarter | Progress clearing back orders at one facility; contract-manufacturer disruption to limit supply into 2027 | Mixed |
| Innovation as a growth driver | — | Base-hit innovation cadence; launches of Dynamo, Connex 360, IV Verify, XR Spine, Novum Syringe | Building |
| Macro (oil, chips, Middle East) | — | Oil exposure under half of historical after the kidney divestiture; manageable at current levels; no material chip shortages; Middle East under 2% of revenue | Monitored |
| CFO transition | — | Anita Zielinski serving as interim CFO; search for a permanent successor underway | In progress |