Baxter International (BAX) Q2 2026 earnings summary

Executive summary

• Second-quarter 2026 sales reached $2.96 billion, up 5% year-over-year on both reported and organic bases, with growth across all segments and divisions.

• Adjusted diluted EPS was $0.56, down 5% year-over-year, reflecting higher-cost inventory and a $0.11 per share benefit from a $75 million IEEPA tariff refund.

• Free cash flow remained strong at $181 million for Q2 and $257 million year-to-date, supporting balance sheet improvement and leverage reduction.

• Strategic priorities include business stabilization, balance sheet strengthening, and continuous improvement through restructuring, automation, and digitization.

• Completed the sale of the Kidney Care business in January 2025, using $3.2 billion after-tax proceeds to repay debt.

Financial highlights

• Q2 2026 worldwide sales were $2.96 billion, up 5% year-over-year; U.S. sales were $1.6 billion (+4%), and international sales were $1.4 billion (+7% reported, +5% organic).

• Net income attributable to stockholders was $126 million ($0.24 per diluted share), up from $91 million ($0.18) in Q2 2025.

• Adjusted operating margin was 14.2%, down 90 basis points year-over-year; gross margin was 34.9% (down 0.4 pts YoY).

• Adjusted SG&A was $648 million (21.9% of sales), and adjusted R&D spending was $125 million (4.2% of sales).

• Special items adversely impacted Q2 2026 net income by $155 million ($0.30 per share).

Outlook and guidance

• Full-year 2026 reported sales growth guidance raised to 3–4%, with organic sales growth of 2–3%.

• Adjusted EPS guidance raised to $1.95–$2.15 per share, reflecting the Q2 tariff refund.

• Adjusted operating margin expected between 13–14% for the year; adjusted tax rate at 18.5–19.5%.

• Net leverage target of approximately 3x by year-end remains in place.

• Ongoing cost savings and restructuring initiatives to mitigate dis-synergies from the Kidney Care sale.