Why is there such a large gap between GAAP and adjusted EPS?

The gap is driven mainly by purchase accounting adjustments, which were $363M pre-tax in the quarter (about $1.32 per share), along with integration, restructuring, separation-related, and product/litigation items. Management says these adjustments are excluded because they are outside underlying operations, but they are recurring in nature for an acquisitive company, so investors should review GAAP results alongside adjusted figures.

Did the company's guidance change materially?

The change was modest. The adjusted diluted EPS range narrowed by raising the low end to $12.62 from $12.52 while keeping the high end at $12.72, lifting the midpoint to about $12.67. Revenue guidance was not changed numerically, but management now expects growth toward the high end of its low-single-digit range. Guidance excludes potential future charges and gains, which are difficult to predict.

How strong is BD's cash generation and capital allocation?

Cash generation improved meaningfully: nine-month operating cash flow rose 33.3% to $2.1B and free cash flow rose 44.6% to $1.7B, helped partly by lower working-capital drag. The company repurchased $2.25B of stock year-to-date (versus $750M last year) while reducing long-term debt by about $4.1B, partly funded by a $3.9B distribution from the spin-off entity. Dividends were $875M year-to-date.

What are the main risks highlighted in the filing?

Key risks include the timing of the BD Alaris Infusion System remediation and return to the U.S. market, tariff volatility and refund uncertainty, geopolitical disruption affecting supply chains and oil prices, pricing pressure from China's volume-based procurement, U.S. healthcare policy and reimbursement changes, and product liability or regulatory actions. International revenue growth of just 0.6% FXN also signals weakness outside the U.S. that bears monitoring.

BDX 8-K: Earnings & Results

01—Abstract

Summary

Summary of the 8-K filed August 6, 2026. Cited figures are marked; the original filing is the authoritative source.

BD (BDX) reported fiscal Q3 2026 results (quarter ended June 30, 2026), its first full quarter as 'New BD' following the February 9, 2026 spin-off and combination of its Biosciences and Diagnostic Solutions business with Waters.

Revenue from continuing operations rose 5.4% to $4.98 billion^a (4.4% on a foreign-currency-neutral basis), with U.S. revenue up 6.9% and International up 3.2% reported (0.6% FXN). Adjusted diluted EPS from continuing operations was $3.23, up 4.9% reported (3.9% FXN), while GAAP diluted EPS from continuing operations was $1.64. Operating income fell 10.3% to $663 million, reflecting higher selling, R&D and other operating expenses, and total GAAP diluted EPS was $1.37 after a $0.27 loss from discontinued operations.

Management raised the midpoint of its FY2026 adjusted EPS guidance to $12.62^b–$12.72 (from $12.52–$12.72) and said revenue growth should land toward the high end of its low-single-digit range. Cash generation was a clear bright spot: nine-month cash from continuing operations rose 33.3% to $2.1 billion and free cash flow rose 44.6% to $1.7 billion. Balance sheet deleveraging continued, with long-term debt down to $13.5 billion from $17.6 billion at fiscal year-end 2025, and the company repurchased $2.25 billion of stock year-to-date versus $750 million a year earlier.

The quarter also carries caveats. Nine-month restructuring charges reached $605 million^c, including $450 million of non-cash asset impairments tied to the 'Excellence Unleashed' simplification program.

The risk factors reference the timing of the BD Alaris Infusion System remediation and return to the U.S. market, ongoing tariff and refund uncertainty, Middle East and supply-chain disruption, and China volume-based procurement pressure. Investors should weigh the strong cash flow and modest guidance raise against the sizable GAAP-to-adjusted gap, which is driven largely by purchase accounting amortization.

02—Key points

Key Highlights

Revenue of $4,983M grew 5.4% reported and 4.4% FXN; U.S. grew 6.9% while International grew only 0.6% on a currency-neutral basis.
Adjusted diluted EPS from continuing operations was $3.23 (+4.9%), versus GAAP diluted EPS from continuing operations of $1.64; total GAAP diluted EPS was $1.37 including a $0.27 discontinued-operations loss.
FY2026 adjusted EPS guidance midpoint raised to $12.67 (range $12.62–$12.72, from $12.52–$12.72); revenue growth now expected toward the high end of the low-single-digit range.
Segment growth (FXN): Interventional +5.5%, BioPharma Systems +5.2%, Connected Care +4.4%, Medical Essentials +3.2%; Specimen Management and Peripheral Intervention were standout sub-segments.
Operating income declined 10.3% to $663M, with R&D up 12.0%, selling and administrative expense up 8.4%, and other operating expense up sharply.
Nine-month cash from continuing operations rose 33.3% to $2.1B and free cash flow rose 44.6% to $1.7B; repurchases reached $2.25B year-to-date.
Nine-month restructuring costs of $605M include $450M of non-cash impairments under the 'Excellence Unleashed' program; long-term debt fell to $13.5B from $17.6B at fiscal year-end.

03—Questions

Frequently Asked Questions

Why is there such a large gap between GAAP and adjusted EPS?
The gap is driven mainly by purchase accounting adjustments, which were $363M pre-tax in the quarter (about $1.32 per share), along with integration, restructuring, separation-related, and product/litigation items. Management says these adjustments are excluded because they are outside underlying operations, but they are recurring in nature for an acquisitive company, so investors should review GAAP results alongside adjusted figures.
Did the company's guidance change materially?
The change was modest. The adjusted diluted EPS range narrowed by raising the low end to $12.62 from $12.52 while keeping the high end at $12.72, lifting the midpoint to about $12.67. Revenue guidance was not changed numerically, but management now expects growth toward the high end of its low-single-digit range. Guidance excludes potential future charges and gains, which are difficult to predict.
How strong is BD's cash generation and capital allocation?
Cash generation improved meaningfully: nine-month operating cash flow rose 33.3% to $2.1B and free cash flow rose 44.6% to $1.7B, helped partly by lower working-capital drag. The company repurchased $2.25B of stock year-to-date (versus $750M last year) while reducing long-term debt by about $4.1B, partly funded by a $3.9B distribution from the spin-off entity. Dividends were $875M year-to-date.
What are the main risks highlighted in the filing?
Key risks include the timing of the BD Alaris Infusion System remediation and return to the U.S. market, tariff volatility and refund uncertainty, geopolitical disruption affecting supply chains and oil prices, pricing pressure from China's volume-based procurement, U.S. healthcare policy and reimbursement changes, and product liability or regulatory actions. International revenue growth of just 0.6% FXN also signals weakness outside the U.S. that bears monitoring.

04—Continue

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