Why was GAAP EPS negative in the quarter when adjusted EPS was positive?

GAAP diluted EPS from continuing operations was $(0.13) because of large non-GAAP-excluded items, principally $487 million of restructuring charges (including $450 million of non-cash asset impairments), $368 million of purchase accounting amortization and adjustments, and a $122 million debt extinguishment impact. Adjusted EPS of $2.90 excludes these items, which management views as outside ordinary operations. Investors should weigh the recurring nature of some of these charges, since restructuring and amortization have appeared in multiple periods.

What did the spin-off of the Biosciences and Diagnostic Solutions business change for BD's reported results?

The business combined with Waters Corporation on February 9, 2026, and its historical results are now reported as discontinued operations for all periods presented. Continuing operations now consist of four segments: Medical Essentials, Connected Care, BioPharma Systems, and Interventional. Year-to-date cash flow includes a $3.86 billion distribution from the spin-off entity, which helped fund share repurchases and debt paydown.

How much did the full-year adjusted EPS guidance change, and what drove it?

Adjusted diluted EPS guidance was raised to $12.52–$12.72 from $12.35–$12.65, an increase of $0.20 at the low end and $0.07 at the high end. Management cited first-half performance and improved visibility into the balance of the year. Revenue growth guidance was unchanged at low-single-digit on a currency-neutral basis, implying that the EPS raise is driven by margin and cost execution rather than top-line expectations.

What are the main risks to the outlook highlighted in the filing?

Key risks cited include tariff policy and refunds, supply chain and energy cost pressures tied to Middle East and other geopolitical developments, pricing and reimbursement pressure (including China's volume-based procurement), and the timing of the replacement and return to the U.S. market of the BD Alaris Infusion System, which depends on customer readiness, supply continuity and FDA engagement. The company also flagged cybersecurity, AI-related and regulatory compliance risks, along with ongoing litigation and product liability exposure.

Is the company's balance sheet improving?

Yes, on several measures. Total debt was reduced from roughly $19.2 billion at fiscal year-end to about $17.3 billion ($2.6 billion current plus $14.7 billion long-term), and cash rose to $813 million from $567 million. Shareholders' equity fell to $24.1 billion from $25.4 billion, largely reflecting the net loss, share repurchases and dividends. Management's capital allocation framework prioritizes deleveraging and returning capital, though the GAAP net loss and impairment charges reduce book equity.

BDX 8-K: Earnings & Results

01—Abstract

Summary

Summary of the 8-K filed May 7, 2026. Cited figures are marked; the original filing is the authoritative source.

BD (Becton, Dickinson and Company) reported fiscal Q2 2026 results (quarter ended March 31, 2026) that were mixed on a GAAP basis but ahead of management's expectations on an adjusted basis.

Reported revenue rose 5.2% to $4.71 billion^a (2.6% on a currency-neutral basis), with U.S. revenue up 5.1% and International up 5.5% reported (down 1.4% currency-neutral). Interventional (+5.3% FXN) and Connected Care (+3.2% FXN) led growth, while Medical Essentials grew 1.7% FXN and BioPharma Systems declined 1.8% FXN. GAAP diluted EPS from continuing operations was $(0.13), driven by $487 million of restructuring charges (including $450 million of non-cash asset impairments tied to the "Excellence Unleashed" exit actions), $368 million of purchase accounting amortization, and a $122 million debt extinguishment impact.

Adjusted diluted EPS was $2.90^b, up 3.9% reported and 1.1% currency-neutral. The quarter reflects the completion of the February 9, 2026 spin-off and Waters combination of the former Biosciences and Diagnostic Solutions business, which is now presented as discontinued operations. Capital allocation was active: BD executed a $2.0 billion accelerated share repurchase and retired $2.1 billion of debt in the quarter.

Year-to-date, the company received a $3.86 billion^c distribution from the spin-off entity, repurchased $2.25 billion of stock, and paid down $2.0 billion of debt. Long-term debt fell to $14.7 billion from $17.6 billion at fiscal year-end, and shareholders' equity declined to $24.1 billion.

Management reaffirmed its low-single-digit currency-neutral revenue growth outlook and raised full-year fiscal 2026 adjusted diluted EPS guidance to $12.52^d–$12.72 from $12.35–$12.65, a modest increase at the midpoint of about $0.17. Investors will want to watch the pace of the Alaris infusion system return to the U.S. market, the durability of margin expansion under BD Excellence, and whether restructuring and impairment charges continue to weigh on GAAP results.

02—Key points

Key Highlights

Revenue of $4.71 billion grew 5.2% reported and 2.6% currency-neutral; more than 90% of the business delivered mid-single-digit growth, per management.
GAAP diluted EPS from continuing operations was $(0.13) versus $0.55 a year ago, driven by $487 million of restructuring costs, including $450 million of non-cash asset impairments.
Adjusted diluted EPS was $2.90, up 3.9% reported and 1.1% currency-neutral; the company raised FY2026 adjusted EPS guidance to $12.52–$12.72.
Interventional led segment growth at 5.3% currency-neutral, while BioPharma Systems declined 1.8% currency-neutral and International revenue fell 1.4% on a currency-neutral basis.
Completed a $2.0 billion accelerated share repurchase and retired $2.1 billion of debt in the quarter, reducing long-term debt to $14.7 billion from $17.6 billion at fiscal year-end.
Spin-off and Waters combination of the Biosciences and Diagnostic Solutions business closed February 9, 2026; prior periods are recast with that business shown as discontinued operations.
Reaffirmed low-single-digit currency-neutral revenue growth guidance for FY2026, with reported revenue growth of low-single-digit-plus.

03—Questions

Frequently Asked Questions

Why was GAAP EPS negative in the quarter when adjusted EPS was positive?
GAAP diluted EPS from continuing operations was $(0.13) because of large non-GAAP-excluded items, principally $487 million of restructuring charges (including $450 million of non-cash asset impairments), $368 million of purchase accounting amortization and adjustments, and a $122 million debt extinguishment impact. Adjusted EPS of $2.90 excludes these items, which management views as outside ordinary operations. Investors should weigh the recurring nature of some of these charges, since restructuring and amortization have appeared in multiple periods.
What did the spin-off of the Biosciences and Diagnostic Solutions business change for BD's reported results?
The business combined with Waters Corporation on February 9, 2026, and its historical results are now reported as discontinued operations for all periods presented. Continuing operations now consist of four segments: Medical Essentials, Connected Care, BioPharma Systems, and Interventional. Year-to-date cash flow includes a $3.86 billion distribution from the spin-off entity, which helped fund share repurchases and debt paydown.
How much did the full-year adjusted EPS guidance change, and what drove it?
Adjusted diluted EPS guidance was raised to $12.52–$12.72 from $12.35–$12.65, an increase of $0.20 at the low end and $0.07 at the high end. Management cited first-half performance and improved visibility into the balance of the year. Revenue growth guidance was unchanged at low-single-digit on a currency-neutral basis, implying that the EPS raise is driven by margin and cost execution rather than top-line expectations.
What are the main risks to the outlook highlighted in the filing?
Key risks cited include tariff policy and refunds, supply chain and energy cost pressures tied to Middle East and other geopolitical developments, pricing and reimbursement pressure (including China's volume-based procurement), and the timing of the replacement and return to the U.S. market of the BD Alaris Infusion System, which depends on customer readiness, supply continuity and FDA engagement. The company also flagged cybersecurity, AI-related and regulatory compliance risks, along with ongoing litigation and product liability exposure.
Is the company's balance sheet improving?
Yes, on several measures. Total debt was reduced from roughly $19.2 billion at fiscal year-end to about $17.3 billion ($2.6 billion current plus $14.7 billion long-term), and cash rose to $813 million from $567 million. Shareholders' equity fell to $24.1 billion from $25.4 billion, largely reflecting the net loss, share repurchases and dividends. Management's capital allocation framework prioritizes deleveraging and returning capital, though the GAAP net loss and impairment charges reduce book equity.

04—Continue

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