10-QPeriod: Q3 FY2026

BECTON DICKINSON & CO Quarterly Report for Q3 Ended Jun 30, 2026

Filed August 6, 2026For Securities:BDX

Summary

Becton Dickinson and Company (BDX) reported a mixed financial performance for the nine months ended June 30, 2026. While total revenues saw a 5.4% increase to $4.983 billion in the third quarter compared to the prior year, driven by solid performance across most segments, net income from continuing operations remained flat year-over-year at $451 million for the quarter. This flat net income was partly due to significant "specified items" which included integration, restructuring, transaction, separation, and purchase accounting adjustments, totaling $538 million after tax in Q3 2026. The company successfully completed the spin-off of its Biosciences and Diagnostic Solutions business in February 2026, which resulted in a $4 billion cash distribution, partly utilized for debt reduction and share repurchases. Despite revenue growth, operating income from continuing operations declined to $663 million in the third quarter of 2026, down from $739 million in the prior year, impacted by higher operating costs, including tariffs and labor. The balance sheet reflects a reduction in total debt by over $2 billion and an increase in cash and equivalents. Investors should note ongoing legal and regulatory matters, particularly FDA warning letters related to manufacturing quality at certain facilities, which present potential risks and future costs.

Key Highlights

  • 1Total revenues for the third quarter of fiscal year 2026 increased by 5.4% to $4.983 billion compared to the prior year, indicating top-line growth.
  • 2Net income from continuing operations for the third quarter was flat year-over-year at $451 million, while diluted EPS from continuing operations saw a slight increase to $1.64 from $1.57.
  • 3The company completed the spin-off of its Biosciences and Diagnostic Solutions business on February 9, 2026, receiving a $4 billion cash distribution used for debt repayment and share repurchases.
  • 4Operating income from continuing operations decreased to $663 million in Q3 2026 from $739 million in Q3 2025, impacted by increased operating costs including tariffs and labor.
  • 5Total debt decreased significantly, with total debt outstanding at $16.808 billion as of June 30, 2026, down from $19.180 billion at September 30, 2025.
  • 6The company is managing significant legal and regulatory matters, including FDA warning letters related to manufacturing quality, which could result in future costs and operational impacts.
  • 7Gross profit margin decreased from 47.3% to 46.4% in Q3 2026, primarily due to tariffs, higher labor costs, and foreign currency translation.

Frequently Asked Questions

The spin-off of the Biosciences and Diagnostic Solutions business on February 9, 2026, resulted in the historical financial results of this business being reflected as discontinued operations for all periods presented prior to the spin-off. BDX received a $4 billion cash distribution from the transaction, which was utilized for debt repayment and share repurchases, significantly reducing the company's debt levels. The spin-off also led to the elimination of the Life Sciences segment from BDX's reporting structure.

The 5.4% increase in total revenues to $4.983 billion in the third quarter of fiscal year 2026 was driven by a combination of volume/other (4.1%), pricing (0.3%), and a positive foreign currency impact (1.0%). Growth was observed across most of BDX's reportable segments, including Medical Essentials, Connected Care, BioPharma Systems, and Interventional, with specific strengths noted in areas like vascular access management, specimen collection, prefillable solutions for biologics, and oncology products.

BDX faces several key risks and potential liabilities. These include ongoing legal proceedings related to product liability for hernia repair devices, pelvic mesh, and vena cava filters. Additionally, the company is addressing FDA warning letters concerning manufacturing quality at its dispensing and El Paso facilities, which could lead to regulatory actions and significant costs. There are also concerns regarding ethylene oxide emissions and potential future regulatory requirements. The company has accrued approximately $1.6 billion for product liability claims and other legal matters as of June 30, 2026, but the ultimate resolution of these matters remains uncertain and could materially impact financial results.

BDX has significantly reduced its total debt, with outstanding debt at $16.808 billion as of June 30, 2026, down from $19.180 billion at September 30, 2025. This reduction was primarily achieved by using proceeds from the spin-off to repay debt. The company maintains a strong liquidity position, with cash and equivalents and short-term investments totaling approximately $864 million at June 30, 2026, primarily held outside the U.S. BDX also has access to a $2.750 billion revolving credit facility, with no borrowings outstanding as of the reporting date.