BD Stock Up in Pre-Market Post Q3 Earnings & Revenue Beat, Margins Down

Becton, Dickinson and Company BDX, popularly known as BD, delivered adjusted earnings per share (EPS) of $3.23 in the third quarter of fiscal 2026, up 4.9% year over year. The figure topped the Zacks Consensus Estimate by 2.9%.

The adjustments include expenses related to purchase accounting adjustments and restructuring costs, among others.

GAAP EPS for the quarter was $1.64, up 4.5% year over year.

BDX’s Revenues in Detail

BD registered revenues of $4.98 billion in the fiscal third quarter, up 5.4% year over year on a reported basis. The figure surpassed the Zacks Consensus Estimate by 1.8%.

At constant exchange rate (CER), revenues climbed 4.4% year over year.

Robust performances by all the segments drove the top-line improvement.

Shares of this company gained nearly 1.8% in today’s pre-market trading.

BD’s Segment Details

Effective Oct. 1, 2025, BD reorganized its organizational units into five distinct, separately-managed segments, which are based on the nature of its product and service offerings. However, subsequent to the spin-off of BDX's former Biosciences and Diagnostic Solutions business and the combination of the business with Waters, the Life Sciences segment was eliminated, leaving the company with four distinct, separately-managed segments.

In the quarter under review, the Medical Essentials segment reported revenues of $1.68 billion, up 4.5% and 3.2% from the year-ago quarter on a reported basis and at CER, respectively.

Revenues in the Connected Care segment totaled $1.22 billion, up 4.9% year over year on a reported basis and 4.4% at CER.

BioPharma Systems segment generated revenues of $670 million, up 6.6% year over year on a reported basis and 5.2% at CER.

BD Interventional segment generated revenues of $1.41 billion, up 6.4% from the year-ago quarter on a reported basis and 5.5% at CER.

BDX’s Geographic Results

In the third quarter of fiscal 2026, revenues in the United States improved 6.9% year over year to $3.08 billion.

International revenues grossed $1.90 billion, up 3.2% from the year-ago quarter on a reported basis and 0.6% at CER.

BD’s Margin Analysis

In the quarter under review, BD’s gross profit increased 3.6% year over year to $2.32 billion. However, the gross margin contracted 83 basis points (bps) to 46.5%.

Selling and administrative expenses increased 8.4% year over year to $1.26 billion. Research and development expenses increased 12.2% year over year to $258 million. Adjusted operating expenses of $1.52 billion rose 9% year over year.

Adjusted operating profit totaled $796 million, reflecting a 5.5% decrease from the year-ago quarter. The adjusted operating margin in the fiscal third quarter contracted 184 bps to 15.9%.

BDX’s Financial Position

BD exited third-quarter fiscal 2026 with cash and cash equivalents and short-term investments of $709 million compared with $816 million at the fiscal second-quarter end. Total debt (including current debt obligations) at the end of the fiscal third quarter was $16.81 billion compared with $17.28 billion at the fiscal second-quarter end.

Cumulative net cash provided by continuing operating activities at the end of third-quarter fiscal 2026 was $2.10 billion compared with $1.58 billion a year ago.

Meanwhile, BD has a consistent dividend-paying history, with its five-year annualized dividend growth being 5.32%.

BD’s Fiscal 2026 Guidance

BD has revised guidance for fiscal 2026 for New BD.

BD continues to project its full fiscal year revenues to grow above low single-digit on a reported basis, while it continues to expect them to grow at low single-digit at CER.

For the full fiscal year, adjusted EPS is now anticipated to be in the range of $12.62-$12.72, narrowed from the prior outlook of $12.52-$12.72. The Zacks Consensus Estimate is pegged at $12.53.

Our Take on BD

BD exited the third quarter of fiscal 2026 with better-than-expected results and solid top- and bottom-line results. Robust performances by all segments and both geographic regions were encouraging.

Apart from these, there were a few other developments during the recent period. BDX was awarded a Vizient Innovative Technology contract for the BD CentroVena One Insertion System. The company launched the Elyra Thulium Fiber Laser System, thus expanding its kidney stone care portfolio. BD also announced a collaboration with Brazil-based pharmaceutical company, EMS, to expand access to GLP-1 therapies through a semaglutide launch utilizing BD's Vystra Injection Pen platform to support consistent, reliable self-injection for patients with obesity and type 2 diabetes. These raise our optimism about the stock.

However, the contraction of both margins does not bode well.

BD’s Zacks Rank and Stocks to Consider

BDX currently carries a Zacks Rank #4 (Sell).

Some better-ranked stocks in the broader medical space that have announced quarterly results are BrightSpring Health Services, Inc. BTSG, Quest Diagnostics Incorporated DGX and Avantor, Inc. AVTR.

BrightSpring, sporting a Zacks Rank of 1 (Strong Buy), reported second-quarter 2026 adjusted EPS of 45 cents, beating the Zacks Consensus Estimate by 21.6%. Revenues of $3.87 billion outpaced the consensus mark by 6.1%. You can see the complete list of today’s Zacks #1 Rank stocks here.

BrightSpring has a long-term estimated growth rate of 46%. BTSG’s earnings surpassed estimates in three of the trailing four quarters and missed once, the average surprise being 16.1%.

Quest Diagnostics reported second-quarter 2026 adjusted EPS of $3.12, beating the Zacks Consensus Estimate by 11%. Revenues of $3.04 billion surpassed the Zacks Consensus Estimate by 2.2%. It currently carries a Zacks Rank #2 (Buy).

Quest Diagnostics has a long-term estimated growth rate of 9.7%. DGX’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 5.8%.

Avantor reported second-quarter 2026 adjusted EPS of 21 cents, beating the Zacks Consensus Estimate by 10.5%. Revenues of $1.69 billion surpassed the Zacks Consensus Estimate by 4.2%. It currently carries a Zacks Rank #2.

Avantor has a long-term estimated growth rate of 1.6%. AVTR’s earnings surpassed estimates in three of the trailing four quarters and missed once, the average surprise being 4.3%.

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This article originally published on Zacks Investment Research (zacks.com).

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