Becton, Dickinson and Company Q3 Earnings Call Highlights

Key Points

• Strong Q3 performance: Becton, Dickinson and Company reported $5 billion in fiscal 2026 third-quarter revenue, up 4.4% on an FX-neutral basis, while adjusted EPS increased 4.9% to $3.23. The company raised its full-year adjusted EPS outlook midpoint to $12.62–$12.72.
• Growth led by key platforms: Double-digit gains in biologic drug delivery, advanced patient monitoring, PureWick, advanced tissue regeneration and peripheral vascular disease supported broad-based results, with BD also expanding its GLP-1 partnerships and product offerings.
• Cash flow improved despite margin pressure: Year-to-date free cash flow rose 45% to $1.7 billion, although tariffs and commercial and R&D investments reduced adjusted operating margin to 24.9%. BD expects fiscal 2026 revenue growth near the high end of its low-single-digit range and approximately 25% adjusted operating margin.

Becton, Dickinson and Company NYSE: BDX reported third-quarter fiscal 2026 revenue of $5 billion, up 4.4% on an FX-neutral basis, as growth across its key platforms and operational productivity helped results exceed the company’s expectations.

Chairman, Chief Executive Officer and President Tom Polen said the quarter was BD’s first full period operating as a focused medical technology company following the separation of its life sciences business. More than 90% of the portfolio delivered high-single-digit growth, he said, while several platforms posted double-digit gains.

Adjusted operating margin was 24.9%, while adjusted diluted earnings per share rose 4.9% to $3.23. The company raised the midpoint of its full-year adjusted EPS outlook and now expects earnings of $12.62 to $12.72 per share.

Growth Platforms Drive Broad-Based Performance

BD cited double-digit growth in biologic drug delivery, advanced patient monitoring, PureWick and advanced tissue regeneration. The company also reported strong performance in peripheral vascular disease and Rowa pharmacy automation.

Executive Vice President and Chief Financial Officer Vitor Roque said Medical Essentials revenue grew 3.2%, with strong U.S. performance in medication delivery solutions supported by share gains in vascular access management and utilization recovery following last year’s fluid shortage. Specimen management delivered high-single-digit growth, driven by share gains in the BD Vacutainer portfolio, improved supply and demand from customers working through competitor back orders.

Connected Care revenue rose 4.4%, led by double-digit growth in advanced patient monitoring and continued strength in consumables. Medication management solutions grew at a low-single-digit rate, supported by double-digit dispensing growth and Rowa pharmacy automation, though results were partly offset by a difficult comparison in Alaris capital sales.

BioPharma Systems revenue increased 5.2%, driven by double-digit biologics growth led by GLP-1 programs. Excluding vaccines, the segment grew in the mid-teens, Roque said. Interventional revenue rose 5.5%, with growth in oncology and peripheral vascular disease, while the urology and critical care business benefited from continued double-digit PureWick growth. Surgery was supported by double-digit gains in infection prevention and advanced tissue regeneration.

Polen said BD has signed approximately 100 agreements across novel and biosimilar GLP-1 programs. He also highlighted a collaboration with Brazilian pharmaceutical company EMS to launch a semaglutide therapy using BD’s Vystra injection pen.

Commercial Investments and Product Launches

Management attributed part of its growth to commercial investments and a reallocation of sales resources toward higher-growth categories. Polen said investments in advanced patient monitoring contributed about 100 to 150 basis points to that platform’s growth rate during the quarter.

BD increased its U.S. advanced patient monitoring sales force by about 15%, Polen said. The company also expanded investments in the Veterans Affairs channel for PureWick and increased its U.S. peripheral intervention sales team by 15%.

During the quarter, BD launched or expanded several products, including the Liverty TIPS Stent Graft in Europe, the Elyra Thulium Fiber Laser System for kidney stone procedures, and the Acumen IQ plus finger cuff and Smart Pressure Controller for its HemoSphere Alta monitoring platform. The Acumen technologies are commercially available in the U.S. and Europe, according to the company.

Margins, Cash Flow and Capital Allocation

Adjusted gross margin was 54.3% and adjusted operating margin was 24.9%, down 100 basis points and 130 basis points, respectively, from the prior year. Productivity gains and favorable mix were offset by approximately 110 basis points of tariff impact, as well as continued investment in selling and research and development activities.

Polen said BD generated approximately 8% gross productivity in its plants during the quarter, supported by plant consolidations, raw-material savings, waste reduction and improved efficiency on critical production lines. Service levels exceeded 90%, while back orders reached record lows, he said.

Year-to-date free cash flow rose 45% from the prior year to $1.7 billion, reflecting improved working capital and lower non-operating cash items, including Alaris remediation outlays. BD returned $3.1 billion to shareholders year to date, including about $2.3 billion in share repurchases and $0.9 billion in dividends. Net leverage ended the quarter at about 2.9 times, compared with the company’s long-term target of 2.5 times.

Updated Outlook and 2027 Considerations

BD now expects fiscal 2026 revenue growth toward the high end of its low-single-digit FX-neutral range. Based on current spot rates, the company expects foreign exchange to provide approximately a 100-basis-point tailwind to reported revenue. It continues to expect adjusted operating margin of about 25%, including tariff effects, and an adjusted effective tax rate between 16% and 17%.

Looking ahead to fiscal 2027, Roque said BD continues to view low-single-digit revenue growth as a reasonable starting framework because the end of Alaris remediation is expected to create a 200-basis-point revenue headwind. He said the company expects “modest” earnings leverage from that revenue baseline, supported by pricing actions, BD Excellence productivity measures and capital allocation actions.

Polen said vaccine pressure in China appeared to be stabilizing and that BD expects to begin lapping the vaccine headwind in the next quarter. China represented about 4% of New BD revenue and could decline into the 3% range as other parts of the company grow faster, he said.

BD also announced that Mike Garrison, executive vice president and president of the Medical Essentials and BioPharma Systems segments, intends to retire after more than 20 years with the company. Peter Menziuso joined BD on June 1 as executive vice president and president of BD Interventional.

About Becton, Dickinson and Company (NYSE:BDX)

Becton, Dickinson and Company (BDX) is a global medical technology company that develops, manufactures and sells a broad range of medical devices, instrument systems and reagents. BD's products are used by healthcare institutions, clinical laboratories, life science researchers and the pharmaceutical industry to enable safe, effective delivery of care, specimen collection and diagnostic testing. The company's operations span multiple business areas focused on medical devices, life sciences research tools and interventional technologies.

BD's product portfolio includes single-use medical devices such as syringes, needles, needlesafety and injection systems, infusion therapy and medication management solutions, as well as vascular access, urology and oncology devices acquired through its interventional business.

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