Baxter Raises 2026 Sales Growth Outlook to 5% and EPS Outlook to $2.15
Key Facts
Baxter raised its 2026 financial outlook after third-quarter sales reached $2.98 billion, up 5% on both a reported and organic basis from the same period a year earlier, according to a company statement published via Nasdaq on October 29. CEO Andrew Hider said the company recorded growth "across all segments and divisions globally." The company raised its reported sales growth range to 4%–5% from 3%–4%, and its organic sales growth outlook to 3%–4% from 2%–3%. The adjustment also lifted the lower end of its adjusted diluted EPS outlook to $2.05 from $1.95, while the upper end remained $2.15. The changes pair strong quarterly performance with an improved annual outlook, while leaving the upper end of the EPS range unchanged.
Third-quarter organic sales growth was 5%, above the company’s revised full-year range of 3%–4%. Second-quarter results offer a direct comparison: Baxter then reported sales of $2.96 billion, up 5% on both a reported and organic basis. That means the annual growth rate held at the same level in the third quarter, while sales rose from $2.96 billion to $2.98 billion. The new annual outlook combines reported growth of 4% to 5% with organic growth of 3% to 4%. Management said current exchange rates are expected to add about 100 basis points to reported sales growth in 2026. By contrast, revenue from the transitional services agreement with Vantive is expected to be a headwind of about $25 million, or nearly 30 basis points of reported sales growth.
By segment, Medical Products & Therapies sales rose 6% on both a reported and organic basis to about $2.1 billion in the third quarter. Infusion systems, drug compounding and IV solutions led growth within the Infusion Therapies & Platforms division, while a sales decline in Injectables offset some of that growth. In Advanced Surgery, sales reached $342 million, up 12%, amid strong global demand for advanced surgery products. The company said growth spanned all segments and divisions, without ranking them by growth rate. The results show differing contributions across businesses during the quarter, combining sales growth in medical products and therapies with strong advanced surgery performance, alongside the decline recorded in Injectables.
The improvement in sales was not matched by higher adjusted EPS during the quarter, which came to $0.58 per diluted share, down 16% year over year. Baxter attributed the decline to a higher effective tax rate. Still, EPS topped analysts’ estimate of $0.52, while quarterly revenue of $2.98 billion exceeded their estimate of $2.91 billion, according to Reuters. The gap between these figures shows the company raised the lower end of its annual EPS outlook even as quarterly adjusted profitability declined from a year earlier. The adjusted diluted EPS range for 2026 remains $2.05 to $2.15, compared with $1.95 to $2.15 previously.
Management said on the results call that the company could face pressures in 2027, including an expected pickup in inflation, particularly in wages, electronics and materials, as it seeks to offset them with efficiency savings. It said Baxter would not receive the same benefit from tariff refunds in 2027 that it saw in 2026, and that it was still awaiting clarity on Section 232 tariffs. The company also expects TSA services related to Vantive to end by the end of January 2027; transitional services revenue was an expected headwind of about $25 million, or nearly 30 basis points of reported sales growth in 2026. These factors combine cost pressures with changes in the contributions from tariff-related and transitional services items as the next year begins.
Among the operational changes cited by management, Baxter will stop producing cephalosporin products at the end of October 2026, while continuing to support customers under contracts through 2027. The company had expected those products to contribute about $50 million in sales and $30 million in operating income during 2026. Baxter did not provide detailed financial guidance for 2027 in the announcement; it said it would provide it alongside its fourth-quarter results in February 2027. The company’s shares closed at $23.50 on October 29, 2026. The next guidance update is due after management outlined expected pressures for the new year, but did not set an annual financial range for it on this call.