BD Q4 FY2026 Earnings: Revenue Rises 5.4% as Lower Costs Lift Profit

BD (NYSE: BDX) reported fiscal Q4 2026 revenue of $5.274 billion, up 5.4% year over year, while GAAP diluted EPS from continuing operations rose 110% to $2.52 from $1.20. Adjusted diluted EPS increased 27.3% to $4.15, and operating income nearly doubled as product costs and other operating expenses declined. The quarter ended September 30, 2026, and prior periods were recast to reflect the separation of the former Life Sciences businesses.

Core Financial Results

Currency had little effect on the quarter: revenue grew 5.4% as reported and 5.6% on a foreign currency-neutral basis. International revenue increased 7.0%, compared with 4.3% growth in the United States.

Profit grew faster than revenue because cost of products sold declined 2.2% and total operating costs and expenses fell 5.1%. This expanded the calculated gross and operating margins substantially.

Gross profit and margin figures are calculated from reported revenue and cost of products sold. Total diluted EPS was $2.54 after including $0.02 from discontinued operations, while the company’s headline GAAP EPS of $2.52 reflects continuing operations.

Business and Segment Performance

All four continuing segments generated reported revenue growth, but performance varied considerably. Interventional was the fastest-growing segment, while Connected Care’s modest increase reflected a decline in Medication Management Solutions partly offset by growth in Advanced Patient Monitoring.

Within Medical Essentials, Specimen Management grew 9.5%, ahead of the 4.5% increase in Medication Delivery Solutions. Interventional’s Peripheral Intervention, Urology and Critical Care, and Surgery units grew 8.8%, 8.2%, and 5.5%, respectively.

Connected Care had the widest internal divergence. Advanced Patient Monitoring revenue increased 15.0% as reported and 17.3% on an FX-neutral basis, but Medication Management Solutions declined 2.3%. International Connected Care revenue rose 9.6%, whereas its U.S. revenue fell 1.0%.

Lower Costs and Smaller Legal Charges Amplified Earnings Growth

The gap between 5.4% revenue growth and 92.5% operating income growth was driven partly by improved expense comparisons. Cost of products sold fell to $2.581 billion from $2.639 billion, integration, restructuring, and transaction expenses declined 38.7%, and other operating expense dropped to $76 million from $232 million.

The quarter included a $66 million benefit primarily within cost of products sold from refunds of tariffs imposed under the International Emergency Economic Powers Act. It also included $45 million of net charges related to product liability and other legal matters, compared with $232 million of such charges in the prior-year quarter.

These items helped explain why GAAP EPS increased 110%, considerably faster than the 27.3% increase in adjusted EPS. The improvement was partly offset by a $209 million income tax provision, up from $7 million in the prior-year period.

Full-Year Cash Flow and Balance Sheet

For fiscal 2026, revenue from continuing operations increased 4.9% to $19.457 billion, or 3.9% on an FX-neutral basis. Full-year net income from continuing operations rose 28.7% to $1.417 billion, although total net income declined 31.7% to $1.145 billion because discontinued operations produced a $271 million loss, compared with $577 million of income in fiscal 2025.

Cash generation improved faster than full-year revenue. Cash provided by continuing operations increased 30.0% to $3.605 billion, while free cash flow rose 42.5% to $2.933 billion after $672 million of capital expenditures.

At September 30, 2026, cash and equivalents were $725 million, up from $567 million one year earlier. Current and long-term debt totaled approximately $16.345 billion, down from approximately $19.179 billion. Fiscal 2026 financing activities included $2.696 billion of debt payments, $2.433 billion of share repurchases, $1.161 billion of dividends, and a $3.916 billion distribution from the spin-off entity.

Fiscal 2027 Guidance

BD issued new fiscal 2027 guidance for the post-separation company, which it calls New BD. The outlook points to low-single-digit revenue growth and more moderate adjusted EPS growth than the company delivered in fiscal Q4 2026.

The company illustrated an approximately 70-basis-point negative foreign currency effect on reported revenue growth. It did not provide a reconciliation of adjusted EPS guidance to GAAP EPS because the timing and size of excluded items remain uncertain.

Management Perspective

Chairman, CEO, and President Tom Polen attributed the quarter’s broad-based performance to BD’s key growth platforms. Management emphasized that the February 2026 separation of the former Biosciences and Diagnostic Solutions businesses created a more focused medical technology portfolio centered on Medical Essentials, Connected Care, BioPharma Systems, and Interventional.

BD also announced a partnership with the U.S. government under which it intends to invest $19 billion in the United States over several years, including $3 billion for manufacturing expansion. The agreement may provide relief from future Section 232 tariffs on covered products and inputs, but that relief remains subject to the final scope of future tariff actions and BD’s achievement of agreed milestones.

Recent Insider Transactions

The supplied six-month insider summary shows 93,808 shares purchased across five transactions and 12,096 shares sold across 11 transactions, resulting in net purchases of 81,712 shares. Total insider holdings were listed at 1.18 million shares, with net purchases equal to 7.50% of those holdings.

The latest 10 disclosed entries were mostly sales, although they also included a derivative exercise and a stock award. All were reported as direct ownership transactions.

The derivative exercise and stock award are different from open-market purchases or sales, and the transaction records alone do not establish insiders’ views of BD’s prospects.

Risks for Investors to Monitor

• Growth is expected to moderate: Fiscal 2027 guidance calls for low-single-digit revenue growth and adjusted EPS growth of 3.1% to 4.7%, below the growth rates reported in fiscal Q4 2026.
• Connected Care remains uneven: Medication Management Solutions revenue declined 2.3% and U.S. Connected Care revenue fell 1.0%, leaving the segment dependent on Advanced Patient Monitoring growth to offset those declines.
• GAAP profit benefited from favorable comparisons: Lower legal charges and the $66 million tariff refund contributed to the sharp increase in reported operating income, making the 110% GAAP EPS growth rate less representative of the adjusted trend.
• Tariff relief is conditional: Benefits under the U.S. government partnership depend on the final scope of potential Section 232 actions and the company meeting agreed investment milestones.
• Transformation costs remain relevant: Full-year restructuring costs included $450 million of noncash impairment charges tied to activities and projects that no longer aligned with BD’s strategy, while the company continues executing its post-separation operating model.

Summary

BD’s fiscal Q4 2026 combined mid-single-digit revenue growth with much faster earnings expansion, supported by broad segment growth, lower product costs, smaller legal charges, and a tariff refund. Interventional led the portfolio, while Connected Care remained the principal area of uneven performance. Fiscal 2027 guidance now shifts attention to whether New BD can sustain organic growth and cash generation while delivering on its restructuring, manufacturing investment, and margin objectives.