Becton, Dickinson and Company

BD reported third-quarter fiscal 2026 revenue of $5 billion, up 4.4% year over year on an FX-neutral basis. Adjusted gross margin was 54.3%, adjusted operating margin was 24.9%, and adjusted EPS was $3.23, up 4.9%. Year-to-date free cash flow was $1.7 billion, up 45%, and the company returned $3.1 billion to shareholders, including about $2.3 billion in share repurchases and $0.9 billion in dividends. For full-year fiscal 2026, BD now expects revenue growth toward the high end of its low-single-digit range, adjusted operating margin of about 25%, an adjusted effective tax rate of 16% to 17%, and adjusted EPS of $12.62 to $12.72.

Tom Polen said this was BD’s first full quarter operating as New BD and described the results as a validation of the company’s more focused portfolio. He emphasized commercial momentum, innovation and operational execution across the company’s growth platforms, saying multiple businesses were growing double digits and that the strategy is starting to translate into faster growth and better earnings power. His tone was confident but measured, with repeated references to disciplined execution, portfolio focus and continued investment in the highest-growth areas.

Vitor Roque said the quarter was broad-based, with strong U.S. performance and several double-digit growth platforms offset by Alaris and vaccines in China. He noted adjusted gross margin of 54.3% and adjusted operating margin of 24.9%, with productivity and mix helping margins while tariffs reduced them by about 110 basis points. He also highlighted year-to-date free cash flow of $1.7 billion, net leverage of about 2.9x, and reiterated a commitment to the long-term 2.5x leverage target, while guiding to full-year adjusted EPS of $12.62 to $12.72 and roughly 25% adjusted operating margin.

Analysts focused on why growth was so broad, whether it was driven more by innovation or commercial changes, and how much of the momentum could carry into fiscal 2027. Management said it was a combination of both: more targeted commercial investments, reallocated sales headcount, AI-enabled sales tools and new product launches were all contributing, along with stronger demand in key platforms. Questions also centered on the 2027 setup and the apparent Q4 slowdown; management pointed to a 200 basis point Alaris headwind next year, stabilization in vaccines, continued China pressure, and a Q4 step-up in Alaris comparison as the main reason for the sequential slowdown.