In its first full quarter after spinning off its Life Sciences business to Waters, BD grew fiscal Q3 2026 revenue 5.4% (4.4% currency-neutral) to $4.98B, but tariffs, labour costs and FDA-related costs cut operating margin to 13.3%; buybacks lifted diluted EPS from continuing operations 4.5% to $1.64.
Revenue
$5.0B
+5.4% YoY
Net income
$451M
0.0% YoY
Diluted EPS
$1.64
+4.5% YoY
Operating margin
13.3%
BD's first full quarter as a pure medical-device company: sales up 5.4%, profit flat, per-share earnings up on a smaller share count
Becton Dickinson (BD) reported fiscal Q3 2026 — the three months to June 30, 2026 (BD's fiscal year ends September 30) — in its 10-Q filed August 6, 2026. It is the first full quarter since BD spun off its Biosciences and Diagnostic Solutions business (the old Life Sciences segment) on February 9, 2026 and combined it with Waters Corporation. BD shareholders received Waters shares equal to 39.2% of the combined company, and BD received a $4 billion cash distribution, which it split between $2 billion of share buybacks and $2 billion of debt repayment.
Because of that deal, the income statement now shows only the remaining medical-device business as "continuing operations"; the Life Sciences results (and prior-year comparisons) sit on a single "discontinued operations" line. All figures below are continuing operations unless labelled otherwise.
Revenue rose 5.4% to $4.983 billion. About 1.0 point of that came from a weaker dollar, so growth on a currency-neutral basis (what sales would have grown at if exchange rates had stayed at last year's levels) was 4.4%. The filing splits the reported growth into 4.1 points of volume/other, 0.3 points of pricing and 1.0 point of currency — so this was a quarter of selling more units, not raising prices.
Profit did not keep pace. Operating income fell 10.3% to $663 million and net income from continuing operations was unchanged at $451 million. Diluted EPS from continuing operations still rose 4.5% to $1.64, because the post-spin-off buyback cut the diluted share count by 4.2% (275.2 million vs 287.2 million shares).
Key figures
Metric (continuing operations)
Fiscal Q3 2026
Fiscal Q3 2025
YoY Change
Revenue
$4,983M
$4,726M
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*Adjusted EPS is from BD's earnings release (8-K Exhibit 99.1, August 6, 2026), not the 10-Q. It excludes "specified items" such as acquisition amortization, restructuring and separation costs.
The total (all-in) net income drop is almost entirely the discontinued-operations line: a $74 million loss this quarter, which the 10-Q says was "primarily related to foreign taxes associated with the Transaction" and residual costs, versus a $123 million profit a year ago when BD still owned the Life Sciences business. It says little about how the ongoing company performed.
Segments: all four grew, three lost margin
After the spin-off, BD reports four segments. There is no longer a "Life Sciences" segment, and the old "Medical" segment was split up in an October 1, 2025 reorganisation; prior-year figures are recast to match. "Segment income" is BD's own measure of each unit's operating profit before corporate costs and special items.
Segment
Q3 FY26 revenue
Q3 FY25 revenue
Reported growth
Currency-neutral growth
Segment margin FY26
Segment margin FY25
Medical Essentials
$1,675M
$1,602M
+4.5%
+3.2%
36.8%
38.2%
Connected Care
$1,224M
$1,166M
+4.9%
+4.4%
32.3%
35.8%
BioPharma Systems
$670M
$629M
+6.6%
+5.2%
38.6%
38.1%
Interventional
$1,414M
$1,328M
+6.4%
+5.5%
39.9%
41.3%
Medical Essentials (needles, IV catheters, blood-collection tubes). Specimen Management grew 7.0% currency-neutral on U.S. share gains for BD Vacutainer tubes and, per the filing, "increased demand due to competitors' backorders" — a boost that may not last. Medication Delivery Solutions grew only 1.6% currency-neutral: U.S. share gains and higher infusion-set use (the prior year was hit by an IV-fluid supply disruption) were partly offset by China. Segment margin fell 1.4 points on tariffs, higher labour costs and currency.
Connected Care (Pyxis dispensing, Alaris infusion pumps, patient monitoring). Advanced Patient Monitoring grew 11.2% currency-neutral on adoption of the Acumen IQ cuff and sensor. Medication Management Solutions grew 2.3%, held back by comparison with strong Alaris pump sales a year earlier during the U.S. relaunch. Segment margin fell the most of any unit, 3.5 points, which BD attributes to lower sales volumes, higher labour costs, and extra selling spend in growth regions.
BioPharma Systems (prefilled syringes and injection pens sold to drugmakers). Currency-neutral growth of 5.2%, with "double-digit growth" in prefillable syringes for biologic drugs "led by sales of GLP-1 delivery products" (the weight-loss and diabetes drug class), partly offset by lower vaccine demand. The only segment whose margin improved (+0.5 points), from lower manufacturing costs.
Interventional (vascular, urology, surgery). The fastest-growing segment at 5.5% currency-neutral: Peripheral Intervention +6.1% (oncology products, Rotarex atherectomy; partly offset by China's volume-based procurement), Urology and Critical Care +4.2% (double-digit PureWick growth), Surgery +6.2%. Margin fell 1.4 points, mostly from costs of responding to an FDA Warning Letter at BD's El Paso plant (below) and tariffs.
U.S. strength, China weakness
U.S. revenue grew 6.9%, with no currency effect. International revenue grew 3.2% as reported but just 0.6% currency-neutral — nearly all of the international gain came from currency. Emerging markets fell 2.6% currency-neutral ($618 million), which the filing attributes to "a decline in China" and in the Middle East/Turkey/Africa region, partly offset by Latin America. The China pressure comes from volume-based procurement (VoBP) — government bulk-buying tenders that force price cuts in exchange for volume. BD cites it as the main drag on Medication Delivery Solutions and on Peripheral Intervention.
Why profit lagged sales
Gross margin fell 0.9 points to 46.4% (gross margin is the share of revenue left after the direct cost of making products). BD attributes 0.8 points to "operating performance": tariffs, higher labour costs and El Paso Warning Letter costs, partly offset by factory efficiency savings. Currency took off another 0.2 points.
Overheads grew faster than sales. Selling and administrative expense rose 8.4% to $1,261 million (25.3% of revenue vs 24.6%), and R&D rose 12.2% to $258 million.
Other operating expense rose to $44 million from $7 million, mainly costs related to the Waters transaction plus legal charges.
Specified items were large and roughly flat: $538 million pre-tax this quarter vs $517 million a year ago, mostly $363 million of purchase-accounting amortization (the non-cash write-down of the value of past acquisitions), plus $48 million of restructuring, $41 million of integration costs and $32 million of separation-related costs. That is why adjusted EPS ($3.23) is about double GAAP EPS ($1.64).
Below operating income, results improved. Interest expense fell to $132 million from $152 million on lower debt. Other income swung to +$19 million from -$22 million, including $22 million of fees Waters paid BD under the transition services agreement. The tax rate was 18.5% vs 20.8%. These items offset the drop in operating income and left net income flat.
The El Paso Warning Letter
On April 30, 2026, the FDA sent a Warning Letter to BD's El Paso plant, which makes the ChloraPrep and PurPrep skin-antiseptic products. The FDA cited deficiencies in investigations, laboratory controls, sterility assurance, contamination control and facility design, and raised concerns about "repeat observations." BD has committed to corrective actions "including independent quality assessments and certain product recalls" and warns these "could lead to additional corrective actions, including further product recalls." The costs are already visible in Interventional's gross margin. This is a live regulatory risk, not a closed matter.
Nine months (fiscal year to date)
Metric (continuing operations)
9M FY2026
9M FY2025
Change
Revenue
$14,183M
$13,539M
+4.8%
Operating income
$1,225M
$1,405M
-12.8%
Net income from continuing operations
$725M
$755M
-4.0%
Diluted EPS, continuing (GAAP)
$2.58
$2.62
-1.5%
Adjusted diluted EPS (earnings release)
$8.59
$8.65
-0.7%
Cash from continuing operating activities
$2,104M
$1,578M
+33.3%
Year-to-date operating income was hit by $605 million of restructuring costs, including a $450 million non-cash impairment (a write-down of assets) booked in Q2 when BD decided to exit projects that no longer fit its "Excellence Unleashed" strategy. Operating cash flow rose 33.3%; free cash flow (operating cash flow minus capital spending) was $1.728 billion, up 44.6%, according to the earnings release. BD paid $875 million in dividends and $2.25 billion for buybacks over the nine months.
Takeaway: New BD is growing sales at a steady 4–5% before currency, led by the U.S., GLP-1 injection devices and patient monitoring, but tariffs, labour costs and the El Paso quality problem cut its operating margin by 2.3 points. The 4.5% EPS gain came from buying back shares with spin-off cash, not from higher profit.
Guidance and outlook
In the August 6 earnings release, BD kept its fiscal 2026 revenue guidance for continuing operations at "low single-digit" currency-neutral growth ("low single-digit plus" as reported, with about 1 point of currency benefit) and said it now expects growth "toward the high end of its range." It raised the bottom of its adjusted EPS range, from $12.52–$12.72 to $12.62–$12.72, which would be +6.1% to +6.9% over fiscal 2025's $11.90. Our own arithmetic: with $8.59 already earned through nine months, the range implies roughly $4.03–$4.13 of adjusted EPS in fiscal Q4, well above Q3's $3.23. The release does not break down what drives that step-up. Part of it is mechanical: Q4 will be the first full quarter entirely on the post-buyback share count. The rest has to come from better margins. BD gives no GAAP EPS guidance.
What to watch in the fiscal Q4 / full-year report (expected in November): whether segment margins stop falling as tariff mitigation and BD Excellence savings build up; whether the Vacutainer gains from competitors' backorders hold once those competitors resupply; any further El Paso recalls; and whether China's procurement pressure keeps emerging markets shrinking. The 10-Q says tariffs will keep adding to operating expense "for fiscal year 2026 and potentially beyond," so a return to last year's 15.6% operating margin is unlikely in the near term.