Baxter International (BAX -2.21%) probably didn’t want this trading week to end. According to data compiled by S&P Global Market Intelligence, the veteran medical device purveyor’s shares flew 19% higher over the period. That was hardly a surprise, as the company published a highly encouraging quarterly earnings report Thursday morning.

There’s nothing as good as a double beat

Baxter posted second-quarter sales of $2.96 billion, which was a 5% improvement over the same period of 2025. Of these, the company’s take in its native U.S. rose 4% to $1.6 billion, while international sales advanced 7% to $1.4 billion.

Net income under generally accepted accounting practices (GAAP) rose more steeply, to $135 million from the year-ago profit of $122 million. On a per-share, non-GAAP (adjusted) basis, profitability fell 5% to $0.56 per share.

On average, analysts tracking Baxter stock were modeling $2.8 billion for revenue and $0.37 per share for adjusted net income.

In terms of product categories, both of Baxter’s revenue buckets saw sales increases. Medical products and therapies posted a 7% gain to nearly $2.1 billion, while healthcare systems and technologies rose 4% to $801 million.

Today’s Change

(-2.21%) $-0.59

Current Price

$26.16

Key Data Points

Market Cap

$14BMarket cap calculated using publicly traded shares outstanding only. Does not include unlisted, private, or dual-class non-traded shares. Implied market cap may vary.

Day’s Range

$26.02 – $27.14

52wk Range

$15.73 – $30.00

Volume

9.3M

Avg Vol

6.9M

Gross Margin

32.05%

Dividend Yield

0.75%

Popping on guidance

Those tailwinds inspired Baxter management to raise its full-year guidance. It’s now anticipating sales growth of 3% to 4% over the 2025 tally. Previously, it was guiding for a flat-to-1% increase. Adjusted earnings per share (EPS) is projected to range from $1.95 to $2.15, up from the prior $1.85 to $2.05.

Baxter is solid, steady, and operating in a world where populations are getting proportionally older (and therefore requiring more medical care). It’s well-positioned for continued growth, and with that, its stock is more than worthy of consideration as a buy.

On Thursday evening, CFO Brian Olsavsky disclosed the company received $600 million in tariff refunds during the second quarter and pledged to automatically issue reimbursements to consumers under a “limited set of circumstances.”

“We are participating in the tariff refund process, and as I mentioned earlier, we received approximately $600 million in Q2. The amount is limited for a couple reasons. First, our teams did a lot of work forward-buying and prepositioning inventory to avoid tariff costs. Second, we are not the importer of record for the large majority of items sold in our store given suppliers typically handle imports and pay relevant tariffs,” Olsavsky said on the call.

“In cases where we did see an increase in costs due to tariffs, we largely absorbed those costs rather than pass them on to customers.”

In January, Amazon CEO Andy Jassy said tariffs were starting to push up prices on the platform. Amazon and many of its third-party sellers had stocked up on inventory ahead of the tariffs to keep prices flat, Jassy said, but most of that supply ran out the previous fall.

“You start to see some of the tariffs creep into some of the prices, some of the items, and you see some sellers are deciding that they’re passing on those higher costs to consumers in the form of higher prices, some are deciding that they’ll absorb it to drive demand, and some are doing something in between,” Jassy said. “I think you’re starting to see more of that impact.”

Jassy also said there were limits to how much Amazon and its sellers could shield shoppers from the added cost.

“At a certain point, because retail is, as you know, a mid-single digit operating margin business, if people’s costs go up by 10%, there aren’t a lot of places to absorb it,” he said. “You don’t have endless options.”

Amazon’s tone marked a shift from the prior year, when Jassy had said prices had not risen appreciably after Trump first announced the tariffs.

Some of it is going back into your pocket

The refund total was smaller than some expected. Olsavsky said Amazon’s total was limited because the company stockpiled inventory in anticipation of tariffs, and because Amazon is not the importer of record for most items sold in its store.

“We have identified a limited set of circumstances where we can trace that we passed specific import charges on to customers, and when we receive those refunds, we will proactively contact affected customers and automatically issue refunds to them. Otherwise, like other large retailers, we’ll utilize refunds to continue to invest in low prices for customers,” Olsavsky said on the call.

Where Amazon can draw a direct line between a tariff charge and what a customer paid, the company says it will act without requiring a claim.

“We have identified a limited set of circumstances where we can trace that we passed specific import charges onto customers, and when we receive those refunds, we will proactively contact affected customers and automatically issue refunds to them,” Olsavsky said. Money that can’t be traced to a specific purchase will go elsewhere: “Otherwise, like other large retailers, we’ll utilize refunds to continue to invest in low prices for customers,” he said.

Outside sellers account for more than 60% of goods sold on Amazon’s marketplace. Many of those third-party sellers, who import goods from overseas, were forced to raise prices due to the tariffs and have since applied for their own refunds. Some sellers who tried to pass tariff costs on to shoppers earlier this year said Amazon penalized their listings for it, pulling the “Add to Cart” button from their product pages before later easing off.

The refunds trace back to the courts, not to the lawsuit against Amazon. They stem from a February Supreme Court ruling that struck down the broad tariffs Trump imposed under the International Emergency Economic Powers Act of 1977, which required the government to repay duties collected from importers.

The Trump administration has since pushed back on how those refunds are being handled, arguing in court filings a judge overstepped his authority in ordering universal refunds for all eligible importers. The U.S. Treasury paid out $49.2 billion in customs refunds in June alone, more than double the roughly $22 billion disbursed the previous month. Combined May and June payouts accounted for roughly 42% of the estimated $166 billion in IEEPA-based duties owed back to importers, according to Reuters.

Amazon isn’t alone in facing the question of what to do with the money. Walmart said it would prioritize using the proceeds to invest in prices. Costco indicated it intends to pass at least some of its refund money back to customers, though the retailer acknowledged that exactly how much and on what schedule remained uncertain. Apple said Thursday its earnings per share were lifted by 11 cents from tariff refunds in its third quarter.