Baxter International Inc. (NYSE:BAX) reported better-than-expected first-quarter earnings on Thursday and reaffirmed its fiscal 2026 guidance.

Earnings Beat, But Profit Declines On Cost Pressures

The hospital care product maker reported its first quarter adjusted earnings of 36 cents per share, beating the consensus of 31 cents.

Earnings fell 35% due to the expected unfavorable comparison to the prior year, which benefited from a timing shift in expense recognition related to an updated estimate, which resulted in the reclassification of certain functional costs from SG&A to cost of sales.

Additionally, higher costs related to tariffs and higher manufacturing costs, including lower absorption, impacted results in the quarter.

Sales of $2.7 billion beat the Wall Street estimate of $2.62 billion, increasing 3% on a reported basis and declining 1% on an organic basis. 

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Segment Performance Mixed Across Portfolio

Medical Products & Therapies sales were approximately $1.3 billion, increasing 2% on a reported basis and declining 2% on an organic basis.

The segment’s performance was impacted by weaker sales ...