BD Stock Gains in Pre-Market Following Q3 Earnings Beat, Margins Up

Becton, Dickinson and Company BDX, popularly known as BD, delivered adjusted earnings per share (EPS) of $3.68 in the third quarter of fiscal 2025, up 5.1% year over year. The figure topped the Zacks Consensus Estimate by 7.6%.

The adjustments include expenses related to purchase accounting adjustments and restructuring costs, among others.

GAAP EPS for the quarter was $2.00, reflecting an uptick of 19% from the year-ago figure.

BDX’s Revenues in Detail

BD registered revenues of $5.51 billion in the fiscal third quarter, up 10.4% year over year on a reported basis. The figure surpassed the Zacks Consensus Estimate by 0.5%.

At constant exchange rate (CER), revenues climbed 9.9% year over year.

Adjusted revenues (which excludes the recognition of accruals relating to the Italian government medical device payback legislation, as well as another legal matter) in the fiscal third quarter was $5.51 billion, up 8.9% year over year on a reported basis, 8.5% at CER and 3% on an organic basis.

Robust performance by the BD Medical and BD Interventional segments drove the top-line improvement.

Shares of this company gained nearly 9.8% in today’s pre-market trading.

BD’s Segment Details

BD’s operations consist of three worldwide business segments — BD Medical, BD Life Sciences and BD Interventional.

In the quarter under review, BD Medical reported worldwide revenues of $2.93 billion, up 14.4% from the year-ago quarter on a reported basis, 14% at CER and 3.2% on an organic basis. Per management, the segment’s organic revenue growth reflected mid-single digit growth in Medication Management Solutions and Pharmaceutical Systems (PS) and low single-digit growth in Medication Delivery Solutions (MDS) business units. This figure compares to our fiscal third-quarter revenue projection of $3.01 billion.

Worldwide revenues in the BD Life Sciences segment totaled $1.25 billion, down 0.5% year over year on a reported basis and 1.1% both at CER and on an organic basis. The segment’s performance reflected declines in Diagnostic Solutions (DS) and Biosciences (BDB) business units. This was partially offset by low single-digit growth in the Specimen Management business unit. This figure compares to our fiscal third-quarter revenue projection of $1.21 billion.

BD Interventional segment generated worldwide revenues of $1.33 billion, up 7.2% from the year-ago quarter on a reported basis and 6.8% both at CER and on an organic basis. The segment’s performance reflected double-digit growth in Urology & Critical Care and mid-single-digit growth in Surgery and Peripheral Intervention. This figure compares to our fiscal third-quarter revenue projection of $1.28 billion.

BDX’s Geographic Results

In the third quarter of fiscal 2025, revenues in the United States improved 10% year over year to $3.18 billion. This figure compares to our fiscal third-quarter revenue projection of $3.21 billion.

Adjusted revenues in the United States in the fiscal third quarter were $3.18 billion, up 9.8% year over year on a reported basis.

International revenues grossed $2.33 billion, up 10.9% from the year-ago quarter on a reported basis and up 9.8% at CER. This figure compares to our fiscal third-quarter revenue projection of $2.28 billion.

Adjusted International revenues in the fiscal third quarter were $2.33 billion, up 7.8% year over year on a reported basis and up 6.7% at CER.

Becton, Dickinson and Company Price, Consensus and EPS Surprise

Becton, Dickinson and Company price-consensus-eps-surprise-chart | Becton, Dickinson and Company Quote

BD’s Margin Analysis

In the quarter under review, BD’s gross profit increased 14.2% year over year to $2.63 billion. The gross margin expanded 158 basis points (bps) to 47.8%. We had projected a gross margin of 44.9% in the third quarter of fiscal 2025.

Selling and administrative expenses increased 10.4% year over year to $1.32 billion. Research and development expenses decreased 0.7% year over year to $297 million. Adjusted operating expenses of $1.62 billion rose 8.2% year over year.

Adjusted operating profit totaled $1.02 billion, reflecting a 25.2% increase from the year-ago quarter. The adjusted operating margin in the fiscal third quarter expanded 219 bps to 18.5%.

BDX’s Financial Position

BD exited third-quarter fiscal 2025 with cash and cash equivalents and short-term investments of $757 million compared with $683 million at the fiscal second-quarter end. Total debt (including current debt obligations) at the end of the fiscal third quarter was $19.34 billion compared with $19.27 billion at the fiscal second-quarter end.

Cumulative net cash provided by continuing operating activities at the end of third-quarter fiscal 2025 was $2.08 billion compared with $ 2,67 billion a year ago.

Meanwhile, BD has a consistent dividend-paying history, with its five-year annualized dividend growth being 5.39%.

BD’s Fiscal 2025 Guidance

BD has revised its financial outlook for fiscal.

BD continues to project its full fiscal year revenues between $21.8 billion and $21.9 billion. The Zacks Consensus Estimate is pegged at $21.83 billion.

However, the rate of revenue growth is now projected to be 8.2-8.7% from the comparable fiscal 2024 period, up from the prior outlook of 8-8.5% on a reported basis from the comparable fiscal 2024 period.

For fiscal 2025, adjusted revenues at CER are expected to continue to reflect growth in the range of 7.8-8.3% from the comparable fiscal 2024 period.

Organic revenue growth is continued to be expected between 3% and 3.5% from the comparable fiscal 2024 period.

For the full fiscal year, adjusted EPS is now anticipated to be in the range of $14.30-$14.45 (representing growth of 8.8-10% from the comparable fiscal 2024 period), up from the previous outlook of $14.06-$14.34 (representing growth of 7-9.1% from the comparable fiscal 2024 period). The Zacks Consensus Estimate is pegged at $14.17.

Our Take on BDX

BD exited the third quarter of fiscal 2025 with better-than-expected results and solid top and bottom-line results. Robust performances by its Medical and Interventional segments and both geographic regions were encouraging. Strength in BD’s segments' business units during the reported quarter was also promising. The expansion of both margins bodes well. Per management, BD Excellence operating system is driving continued margin expansion. This looks promising for the stock.

Apart from these, there were a few other developments during the recent period, like its definitive agreement to combine BD's BDB and DS business units with Waters Corporation. The transaction is expected to create an innovative life science and diagnostics leader with an industry-leading financial outlook focused on regulated, high-volume testing. BD Medical segment’s MDS business unit announced its plans to invest $35 million in Nebraska facility to support new BD PosiFlush Prefilled Flush Syringe production lines, product innovation and operational efficiencies, while the PS business unit announced the first pharma-sponsored combination product clinical trial using the BD Libertas Wearable Injector for subcutaneous delivery of complex biologics.

However, BD’s lower revenues from its Life Sciences segment were disappointing.

BD’s Zacks Rank and Stocks to Consider

BDX currently carries a Zacks Rank #4 (Sell).

Some better-ranked stocks in the broader medical space that have announced quarterly results are GE HealthCare Technologies Inc. GEHC, West Pharmaceutical Services, Inc. WST and Boston Scientific Corporation BSX.

GE HealthCare, sporting a Zacks Rank #1 (Strong Buy), reported second-quarter 2025 adjusted EPS of $1.06, beating the Zacks Consensus Estimate by 16.5%. Revenues of $5.01 billion outpaced the consensus mark by 0.7%. You can see the complete list of today’s Zacks #1 Rank stocks here.

GE HealthCare has a long-term estimated growth rate of 5.8%. GEHC’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 12.5%.

West Pharmaceutical reported second-quarter 2025 adjusted EPS of $1.84, beating the Zacks Consensus Estimate by 21.9%. Revenues of $766.5 million surpassed the Zacks Consensus Estimate by 5.4%. It currently flaunts a Zacks Rank #1.

West Pharmaceutical has a long-term estimated growth rate of 8.4%. WST’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 16.8%.

Boston Scientific reported second-quarter 2025 adjusted EPS of 75 cents, beating the Zacks Consensus Estimate by 4.2%. Revenues of $5.06 billion surpassed the Zacks Consensus Estimate by 3.5%. It currently carries a Zacks Rank #2 (Buy).

Boston Scientific has a long-term estimated growth rate of 14%. BSX’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 8.1%.

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This article originally published on Zacks Investment Research (zacks.com).

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