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Baxter, a medical products manufacturer, has cut its 2025 forecast and shares have plunged to a 19-year low.

Baxter International cut its profit forecast for 2025 and reported disappointing earnings on Thursday as the lingering effects of Hurricane Helene, and hospital fluid conservation continued to weigh on its medical product business.

The shares of the medical product maker fell about 23% during morning trading, reaching their lowest level since 2006

The CFO Joel Grade said that despite the fact that he never wants to lower expectations, his overall goal is to reduce the outlook in order to take into account more of the possible downside risks.

Baxter has voluntarily halted shipments after receiving reports of multiple injuries and two deaths.

The manufacturer of medical products now expects adjusted earnings between $2.42 to $2.52 per shares, down from the previous expectation of $2.47 - $2.55. Analysts expected $2.52 per shares.

Hurricane Helene, which struck in North Carolina last year and damaged Baxter’s North Carolina facility, caused the production of IV solutions to be disrupted. Hospitals were then forced to conserve fluids. The company reported that while supply has been restored, the demand is still low.

The company stated that the volume declines of IV solutions had a significant impact on operating income and profit/share. Its outlook assumes fluid conservation will remain at 20 percent below normal levels through the remainder of 2025.

Robbie Marcus, JPMorgan analyst, said that many investors had been concerned about this scenario due to the absence of an announcement following the appointment of a new CEO at the beginning July.

Earnings for the second quarter were 59 cents, which was below expectations of 61 cents. Revenue came in at $2.81 billion - just shy of expectations.

Baxter’s pharmaceuticals division also underperformed with anesthesia sales dropping by low double-digits and injectable drug sales declining by 1% globally.

Baxter has reduced its estimate of the impact on 2025 to $40 million from $60 million or $70 million. (Reporting from Bengaluru by Kamal Choudhury; editing by Vijay Kishore).

(source: Reuters)