Becton, Dickinson and Company
BDX · NYSE
Next quarter
Reports Nov 5, 2026.
Consensus is $4.06 EPS for Sep 2026 across 7 estimates, ranging $4.03 to $4.10.
BDX Jun 2026
- 2.87%
- $3.14
- $3.23
- —
- $4.98B
Reported results
- $4.98B
- 46.46%
- $663.00M
- 13.31%
- $377.00M
- $1.37
Highlights
- Adjusted EPS: Third-quarter adjusted diluted EPS from continuing operations was $3.23, ahead of the $3.14 consensus by 2.87% and up 4.9% from $3.08 a year ago.
- Revenue growth: Continuing-operations revenue was $4.983 billion, up 5.4% reported and 4.4% foreign-currency neutral from $4.726 billion, with volume and other factors contributing 4.1 percentage points and pricing 0.3 points.
- New BD: The first full quarter after the February 9 spin-off produced growth across all four remaining segments, led by BioPharma Systems at 5.2% FX-neutral growth and Interventional at 5.5%.
- U.S. momentum: U.S. revenue increased 6.9% to $3.081 billion, while international revenue rose 0.6% FX-neutral to $1.902 billion; China volume-based procurement remained a drag.
- Cash generation: Nine-month cash from continuing operations rose 33.3% to $2.104 billion, and free cash flow increased 44.6% to $1.728 billion.
- Guidance: BD expects full-year revenue growth toward the high end of its low-single-digit-plus reported range and raised the adjusted EPS guidance midpoint to $12.67 from $12.62, maintaining a $12.62-$12.72 range.
- Reported earnings: GAAP diluted EPS from continuing operations was $1.64 versus $1.57 a year ago, but total diluted EPS was $1.37 versus $2.00 because discontinued operations recorded a $74 million loss.
- Margin pressure: Operating income declined 10.3% year over year to $663 million as gross margin fell to 46.4% from 47.3%, reflecting tariffs, labor costs and El Paso remediation expenses.
- Capital allocation: BD used $2.250 billion for share repurchases and $2.696 billion for debt repayment in the first nine months, reducing total debt to $16.808 billion from $19.180 billion at September 30, 2025.
Analysis
BD’s fiscal third quarter was a solid operating print for the newly focused medical-technology company: adjusted EPS of $3.23 exceeded the $3.14 consensus by 2.87%, while revenue of $4.983 billion rose 5.4% reported and 4.4% FX-neutral from a recast year-ago period. Revenue also improved 5.8% sequentially from $4.71 billion in the second quarter, and operating income rebounded to $663 million from $93 million. The comparison with Q2 is distorted by separation-related and other charges, while the year-ago total EPS comparison is distorted by the former Biosciences and Diagnostic Solutions business being classified as discontinued operations.
The defining feature was broad-based demand in the first full quarter of New BD, particularly in the U.S., where revenue rose 6.9%. Interventional and BioPharma Systems led FX-neutral segment growth, supported by peripheral intervention, PureWick, surgery products and GLP-1 delivery systems. That growth was partly offset by China volume-based procurement and weaker vaccine demand. Profit conversion was less compelling: GAAP operating income fell 10.3% year over year as tariffs, labor inflation and costs associated with the El Paso FDA Warning Letter pressured margins, despite continuous-improvement savings. Strong cash generation and the $4 billion spin-off distribution funded debt reduction and repurchases, while management raised the full-year adjusted EPS midpoint to $12.67.
New BD growth platforms
- Medical Essentials: Revenue was $1.675 billion, up 3.2% FX-neutral. Specimen Management grew 7.0% FX-neutral, helped by U.S. Vacutainer share gains and competitor backorders, while Medication Delivery Solutions grew 1.6% FX-neutral and remained pressured by China procurement dynamics.
- Connected Care: Revenue reached $1.224 billion, up 4.4% FX-neutral. Advanced Patient Monitoring grew 11.2% FX-neutral on adoption of Acumen IQ products and consumables; Medication Management Solutions grew 2.3% on a strong backlog and favorable U.S. dispensing-platform mix.
- BioPharma Systems: Revenue increased 5.2% FX-neutral to $670 million, driven by double-digit prefillable-solution growth in biologic drugs, including GLP-1 delivery products. Lower vaccine demand remained a partial offset.
- Interventional: Revenue rose 5.5% FX-neutral to $1.414 billion. Peripheral Intervention grew 6.1%, Urology and Critical Care 4.2%, and Surgery 6.2%, supported by oncology products, Rotarex, PureWick, infection prevention and advanced tissue regeneration.
Margins and execution
Revenue growth did not translate into higher GAAP operating profit. Gross margin declined to 46.4% from 47.3% a year ago, with management citing tariffs, higher labor costs and El Paso remediation costs, partly offset by lower manufacturing costs from continuous-improvement initiatives. Selling and administrative expense rose to 25.3% of revenue from 24.6%, while research and development increased to 5.2% from 4.9%. Operating income fell to $663 million from $739 million, although lower interest expense and favorable tax effects helped keep continuing-operations net income broadly flat at $451 million versus $451 million.
Cash and capital allocation
- Operating cash flow: Nine-month cash from continuing operations was $2.104 billion, up from $1.578 billion, while free cash flow rose to $1.728 billion from $1.195 billion. Capital expenditures were $376 million, versus $383 million a year earlier.
- Spin-off proceeds: BD received a $3.857 billion net distribution related to the Biosciences and Diagnostic Solutions separation. It used approximately $2 billion for an accelerated share repurchase and the remaining proceeds for debt repayments.
- Balance sheet: Total debt was $16.808 billion at June 30, down from $19.180 billion at September 30, 2025. Cash and equivalents, including restricted cash, were $863 million, and the company had $892 million of commercial paper outstanding.
- Shareholder returns: Nine-month share repurchases totaled $2.250 billion and dividends totaled $875 million. The company had 8.3 million shares remaining under its active repurchase authorization at quarter-end.
FY2026 guidance
BD maintained its full-year revenue framework but now expects growth toward the high end of its low-single-digit-plus reported range; foreign-currency-neutral growth remains in the low-single digits, with an illustrative currency benefit of approximately 100 basis points. Adjusted diluted EPS guidance was narrowed upward at the low end to $12.62-$12.72 from $12.52-$12.72, lifting the midpoint from $12.62 to $12.67. The guidance excludes amortization, acquisition and separation costs, restructuring, certain legal and remediation items, and other charges that remain material to GAAP earnings.
Regulatory and litigation costs
The El Paso manufacturing facility’s April 2026 FDA Warning Letter affected third-quarter gross margin. BD recorded costs for corrective actions and certain product recalls related to deficiencies in investigations, laboratory controls, contamination control and facility design; the FDA may require additional actions and is expected to withhold export certificates and certain approvals until compliance is confirmed. BD also carried approximately $1.6 billion of accruals for product liability and other legal matters at June 30, down from $1.8 billion at September 30, while defending roughly 7,090 hernia claims and 3,850 implantable-port claims.
