BD Q4 Adjusted Margin Expands as FY27 Outlook Flags Alaris Drag

BD (BDX) ended fiscal 2026 with broad-based fourth-quarter growth and a sharp expansion in adjusted profitability, while its initial fiscal 2027 outlook calls for low-single-digit currency-neutral revenue growth despite an estimated 200-basis-point headwind from Alaris capital sales.

Revenue for the quarter ended September 30 rose 5.4% to $5.27 billion, or 5.6% on a currency-neutral basis. Adjusted operating income increased 16.8% to $1.51 billion, lifting adjusted operating margin by 280 basis points to 28.6%. Adjusted diluted earnings per share climbed 27.3% to $4.15 from $3.26.

On a GAAP basis, fourth-quarter operating margin was 19.6%, compared with 10.7% a year earlier, while diluted earnings per share from continuing operations rose to $2.52 from $1.20. Adjustments included purchase-accounting items, integration and restructuring costs, separation-related expenses, and product, litigation and other items.

Growth across major platforms

All four continuing-operations segments reported currency-neutral revenue growth in the quarter. Medical Essentials, the largest contributor, generated $1.79 billion of revenue, up 5.9%. Medication Delivery Solutions grew 4.5%, supported by share gains and utilization across the Vascular Access Management portfolio. Specimen Management advanced 9.4%, reflecting gains in the BD Vacutainer portfolio, additional supply capacity and competitor disruptions.

Connected Care revenue increased 2.1% on a currency-neutral basis to $1.27 billion. Medication Management Solutions declined 2.2%, although BD said the business posted mid-single-digit growth excluding Alaris, with infusion-set demand benefiting from Alaris share gains and continued strength in BD Rowa. Advanced Patient Monitoring rose 17.3% to $317 million, led by HemoSphere Alta, Smart Recovery products and demand for legacy consumables.

BioPharma Systems revenue grew 7% to $748 million. Double-digit growth in biologics, including strength related to GLP-1 therapies, was partly offset by a moderating headwind in vaccine products.

Interventional recorded the fastest segment growth, with revenue rising 7.6% to $1.47 billion. Peripheral Intervention grew 8.3% to $577 million, supported by the Rotarex Atherectomy System, recent product launches and oncology growth. Urology and Critical Care increased 8.7% to $473 million as PureWick maintained double-digit growth, while Surgery revenue rose 5.5% to $422 million on double-digit U.S. growth in Advanced Tissue Regeneration and strength outside the United States.

BD also highlighted product expansion efforts. The Liverty TIPS Stent Graft, launched in Europe during the third quarter of fiscal 2026, entered the U.S. market in the first quarter of fiscal 2027. The company also received U.S. 510(k) clearance for its Phasix ST Parastomal Hernia Mesh and expects a U.S. launch in the first half of fiscal 2027.

Full-year cash flow rises 42%

For fiscal 2026, revenue increased 4.9% to $19.46 billion, or 3.9% on a currency-neutral basis. Adjusted diluted EPS rose 6.7% to $12.70, although adjusted operating margin slipped 20 basis points to 25%. GAAP diluted EPS was $5.06, compared with $3.81 in fiscal 2025.

Operating cash flow from continuing operations increased 30% to $3.61 billion. Free cash flow rose 42% to $2.93 billion, reflecting improved working capital and lower non-operational cash items. Adjusted free cash flow conversion increased to 74% from 57%.

BD returned $3.6 billion to shareholders during the year, comprising $2.4 billion of share repurchases and $1.2 billion of dividends. It ended fiscal 2026 with net debt of $15.61 billion and net leverage of 2.7 times adjusted EBITDA.

The company attributed part of its operating progress to its BD Excellence program. It said more than 2,000 Kaizen events and network optimization projects contributed to manufacturing efficiencies and raw-material savings, while gross productivity in its plants improved by about 8%. BD also said all savings had been identified under the $200 million cost-reduction program launched at the beginning of fiscal 2026.

Fiscal 2027 outlook includes Alaris and currency headwinds

BD expects low-single-digit currency-neutral revenue growth in fiscal 2027. The outlook incorporates an approximately 200-basis-point year-over-year headwind from Alaris capital sales and an estimated 70-basis-point foreign-exchange drag on reported revenue.

Adjusted diluted EPS is projected at $13.10 to $13.30, representing growth of 3.1% to 4.7%. Adjusted operating margin is expected to be approximately flat year over year, with an adjusted tax rate of 16% to 17% and about 273 million weighted-average shares outstanding.

Management expects first-quarter revenue growth at the low end of the full-year range and first-half growth in line with the midpoint. First-quarter adjusted EPS is forecast at $2.32 to $2.37, reflecting revenue seasonality, the annualization of prior-year commercial investments and inflationary pressure.

The guidance is based on information available as of November 5, 2026, and assumes no more significant escalation in macroeconomic complexity. BD cautioned that international trade policies and tariffs remain fluid; its assumptions reflect tariff policies in effect as of November 4. Geographic performance also remained uneven in fiscal 2026, with China revenue declining 9.5% on a currency-neutral basis in both the fourth quarter and full year.