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BD beat Q2 expectations with revenue of $4.7 billion and adjusted EPS of $2.90, and management raised full-year adjusted EPS guidance to $12.52–$12.72 while keeping revenue guidance at low-single-digit growth.
Growth was broad-based across the portfolio, with strong performance in areas like advanced patient monitoring, biologics, PureWick, and interventional products helping offset headwinds from Alaris, vaccines, China, and tariffs.
The company is prioritizing share repurchases and operational efficiency, returning $2.3 billion to shareholders in the quarter while continuing cost cuts, productivity gains, and disciplined capital allocation despite an FDA warning letter issue at its El Paso facility.
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Becton, Dickinson and Company (NYSE:BDX) reported fiscal second-quarter revenue and adjusted earnings ahead of its internal expectations, while management raised its full-year adjusted earnings outlook and said growth was broad-based across most of the portfolio.
Chairman, Chief Executive Officer and President Tom Polen said revenue was $4.7 billion, up 2.6% on an FX-neutral basis, with adjusted operating margin of 24.2% and adjusted diluted earnings per share of $2.90. Polen said more than 90% of the company’s portfolio delivered mid-single-digit growth, while known pressures from Alaris, vaccines and China weighed on reported growth.
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“The quarter demonstrates the increasing quality, breadth, and resilience of New BD,” Polen said, adding that the company is focused on three priorities: compete, innovate and deliver.
Polen said BD delivered double-digit growth in several key platforms, including biologic drug delivery, advanced patient monitoring, PureWick and advanced tissue regeneration. The company also posted mid- to high-single-digit growth in oncology, peripheral arterial disease and Rowa pharmacy automation.
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Executive Vice President and Chief Financial Officer Vitor Roque said Medical Essentials grew 1.7%, with solid U.S. growth in MDS and specimen management, partly offset by China market dynamics. Connected Care grew 3.2%, led by advanced patient monitoring, which increased 12% on strength in U.S. consumables. Biopharma Systems declined 1.8%, as double-digit biologics growth led by GLP-1 products was more than offset by lower vaccine demand.
Interventional revenue grew 5.3%, with mid-single-digit growth across the segment. Roque said UCC was led by continued double-digit growth in PureWick, while surgery benefited from double-digit growth in infection prevention and advanced tissue regeneration. Peripheral intervention growth was led by peripheral vascular disease and oncology, partially offset by China market dynamics.
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In response to an analyst question, Polen said the company’s three known pressure areas were playing out as expected. He said Alaris represents a 100-basis-point headwind this year and is expected to become a 200-basis-point headwind in fiscal 2027 before stabilizing in fiscal 2028.
Roque said adjusted gross margin was 54.7%, down 90 basis points from the prior year. Productivity and mix contributed 70 basis points of benefit, while tariffs created a 160-basis-point headwind. Adjusted operating margin declined 110 basis points to 24.2%, also reflecting tariff pressure and increased commercial investments in growth areas.
Adjusted EPS of $2.90 rose 3.9% from the prior year. Roque said adjusted EPS excluded approximately $450 million of non-cash asset impairment charges recorded during the quarter, related to activities BD exited after separating its life sciences business and combining it with Waters.
BD raised its full-year adjusted EPS guidance to a range of $12.52 to $12.72. The company reaffirmed full-year revenue guidance of low-single-digit growth and said second-half revenue growth is expected to be roughly similar to the first half. Roque said currency, based on current spot rates, is expected to be a revenue tailwind of about 120 basis points. BD continues to expect adjusted operating margin of approximately 25%, including the impact of tariffs, and an adjusted effective tax rate of 16% to 17%.
Year-to-date free cash flow was $1.1 billion, which Roque said was up significantly from the prior year due to working capital management, improved collections, inventory management and progress reducing non-operational cash items.
BD returned approximately $2.3 billion to shareholders during the quarter, including $2 billion in share repurchases and $300 million in dividends. The company also retired $2.1 billion of debt and ended the quarter with net leverage of approximately 2.9 times, compared with its long-term target of 2.5 times.
Polen said BD views its stock as “substantially undervalued” and currently sees share repurchases as a top use of capital. He said the company still has an active pipeline for tuck-in acquisitions, but will remain disciplined and focused on deals that accelerate revenue growth, improve margins and increase return on invested capital.
Roque said BD’s capital allocation framework remains centered on returning capital to shareholders, investing in focused growth opportunities and maintaining balance sheet discipline.
Polen said BD Excellence, the company’s operating system for productivity and process improvement, drove approximately 8% productivity in the quarter and service levels above 90%. He said BD has reduced its manufacturing footprint by roughly half to about 50 sites globally, with further reductions underway.
The company also reported progress on a $200 million cost-out program, with a $150 million run rate already completed and visibility to finish by the end of next year.
Polen said BD has applied BD Excellence to five development programs year to date, reducing time to launch by more than 10 months on average. Recent launches included the EnCor EnCompass biopsy system in the U.S., the Revello Vascular Covered Stent in Europe and expanded U.S. and European launches of the HemoSphere Stream module for continuous non-invasive blood pressure monitoring.
BD also highlighted continued traction in Alaris, including approximately 50 basis points of share gains in the quarter and about 150 basis points year to date. Polen said the company had the largest Alaris competitive funnel in its history and did not lose any infusion accounts in the quarter.
Polen addressed an FDA warning letter related to BD’s El Paso, Texas, facility, which manufactures ChloraPrep and PurPrep infection prevention products. He said BD voluntarily placed the products on ship hold in the U.S. while it completes additional final release testing, which is already performed for products sold in Europe.
Polen said the testing is expected to take approximately three weeks, and BD would resume shipments pending satisfactory results. He said the company is continuing to manufacture the products during the hold and that there have been no patient safety signals.
BD also announced Roque as permanent CFO after he had served in the role on an interim basis since last fall. Polen said the company conducted a comprehensive search that included external candidates before selecting Roque, who has spent 25 years at BD across businesses, regions and segments.
Roque said his priorities include supporting growth, executing without disruption, maintaining clear communications with investors and staying disciplined on capital allocation. Polen also noted that Rick Byrd, president of the Interventional segment, plans to retire after nearly 25 years with the company.
Becton, Dickinson and Company (BDX) is a global medical technology company that develops, manufactures and sells a broad range of medical devices, instrument systems and reagents. BD's products are used by healthcare institutions, clinical laboratories, life science researchers and the pharmaceutical industry to enable safe, effective delivery of care, specimen collection and diagnostic testing. The company's operations span multiple business areas focused on medical devices, life sciences research tools and interventional technologies.
BD's product portfolio includes single-use medical devices such as syringes, needles, needlesafety and injection systems, infusion therapy and medication management solutions, as well as vascular access, urology and oncology devices acquired through its interventional business.
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The article "Becton, Dickinson and Company Q2 Earnings Call Highlights" was originally published by MarketBeat.
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