Baxter saw its stock price plunge by more than 20% after it lowered its revenue projections for the remainder of this year, while reporting persistent expenses related to recovering from last fall’s Hurricane Helene, as well as an ongoing pause in shipments of one of its hospital infusion pumps.
Earlier this year, the company had pitched operational sales growth of between 4% and 5% for the full 2025 calendar. This week Baxter revised that range down to 3% and 4%, following softer-than-expected demand for IV fluids in the wake of the hurricane, which had damaged the company’s manufacturing site in Western North Carolina—further threatening U.S. supplies of saline, sterile water and other medical solutions that were already seeing nationwide shortages.
But while Baxter said it got all of its production lines up and running at pre-storm levels by February—after exiting the market in China, and laying out a plan to fly in some 18,000 tons of the liquids from overseas—the company said healthcare providers this year have continued to be conservative when it comes to administering IV fluids.
“We attribute a portion of the softness in demand to follow-on impacts related to the hurricane, which caused some hospitals to evaluate IV infusion protocols—including utilizing IV push in lieu of pre-mixed products in certain situations,” Baxter’s chief operating officer, Heather Knight, said on the company’s second-quarter earnings call with investors. “Our commercial teams are working with customers to reinforce the clinical benefit and value proposition of pre-mixed injectables, while also continuing to execute on our new product launches.”
“We expected a bit more recovery in that, quite honestly, and have now contemplated that in the guidance that's been set,” Knight said. “We felt it was prudent to be a little bit more reserved, and I would say measured, in our approach to the second half [of the year], based on the utilization and consumption backdrop that we're seeing across the market and the current macroeconomic environment.”
The company’s pharmaceutical division posted $612 million in revenue, for a 1% gain, though sales of injectables were down 1% and anesthesia products dropped by low double digits. Medical products and therapies, meanwhile, brought in $1.32 billion, for a 1% gain.
At the same time, Baxter has been working on a correction effort for its Novum IQ large-volume infusion pump, following reports of 79 serious injuries and two deaths linked to potential under- or overdelivery of medications.
The company said it has temporarily paused planned installations of the device as it sorts out the issue, which could result in unintended drug delivery levels when changing the flow rate. Current pumps can still be used following the new instructions Baxter has provided, and the hardware does not need to be returned to the manufacturer at this time.
Baxter said its goal is to resume shipments by the end of the year, but that the company could not commit to an exact timeline. The low end of its 2025 financial guidance is tied to Novum’s return being delayed into 2026, according to CFO Joel Grade.
With Helene-related costs, the company has seen a year-to-date negative free cash flow of $144 million, despite logging $77 million in positive cash flow during the second quarter.
“We are intensely focused on improving our cash flow generation in the second half of the year,” Grade said on the earnings call. “To achieve this objective, we are taking several actions, with a key focus area on our inventory management.”
For second-quarter revenue in total, Baxter posted $2.81 billion in sales for a 1% operational gain over the prior year, in line with its previous guidance from May. U.S. sales accounted for about $1.54 billion, for a decline of 1%, while international sales grew 3% to about $1.27 billion.
In terms of changing tariffs—and excluding the potential for new levies on pharmaceuticals—the company estimated a smaller impact of about $40 million for the year, down from previous predictions of $60 million to $70 million.
Meanwhile, Baxter is preparing to welcome a new CEO, following the retirement of José Almeida in February. The company has tapped Andrew Hider, former head of ATS, a provider of factory automation solutions across multiple industries.
Baxter has not yet announced a formal start date, but previously said Hider would begin no later than September 3. Interim CEO Brent Shafer said on the call that it “should be a bit before the stated end-of-the-month timeframe.”