Group 1 - The article does not provide any relevant content regarding company or industry insights [1]

Core Insights - Becton, Dickinson and Company (BD) reported stronger than expected first fiscal quarter 2026 results, highlighting the completion of its Life Sciences business combination with Waters through a Reverse Morris Trust transaction [2] Quarterly Results - BD posted total revenue of $5.3 billion, reflecting a 0.4% year-over-year increase on an FX-neutral basis; "new BD" grew 2.5% with broad-based growth across most of the portfolio, partially offset by challenges in approximately 10% of the business, including Alaris, vaccines in China, and market dynamics in China [3] - The quarter demonstrated "disciplined execution" with accelerated commercial initiatives and strength in several growth platforms, including double-digit growth in biologic drug delivery, PureWick, advanced tissue regeneration, pharmacy automation, and high single-digit growth in advanced patient monitoring [3] Profitability - BD reported an adjusted gross margin of 53.4% and adjusted EPS of $2.91, both exceeding management's expectations; however, adjusted EPS was down 15.2% year-over-year, primarily due to tariffs [4] Segment Performance - Growth was led by Connected Care and Interventional, with details provided on performance across the company's recast segment structure, which includes Medical Essentials, Connected Care, Biopharma Systems, Interventional, and Life Sciences [5] Transaction and Financial Strategy - BD closed the Waters transaction, receiving a $4 billion cash distribution, which will be allocated as $2 billion for accelerated share repurchases and $2 billion to pay down debt; net leverage ended the quarter at 2.9x, with a long-term target of 2.5x [6] - Management maintained fiscal 2026 guidance for low single-digit revenue growth and adjusted EPS of $12.35 to $12.65, while cautioning about ongoing headwinds from China, vaccines, Alaris, and a multi-hundred-basis-point tariff impact [6]

Company Performance - Becton Dickinson and Co. reported first-quarter 2026 adjusted earnings of $2.91 per share, exceeding the consensus estimate of $2.81 [2] - The company achieved sales of $5.25 billion, slightly above the consensus of $5.15 billion [2] - Becton Dickinson lowered its fiscal 2026 adjusted earnings guidance from a range of $14.75-$15.05 per share to $12.35-$12.65 per share, compared to the consensus of $14.72 [2] Market Overview - U.S. stocks showed mixed performance, with the Dow Jones index falling approximately 250 points, down 0.51% to 49,860.74 [1] - The NASDAQ increased by 0.12% to 23,058.05, while the S&P 500 decreased by 0.02% to 6,931.07 [1] - Information technology shares rose by 1%, while consumer discretionary stocks fell by 1.3% [1] Commodity Market - Oil prices decreased by 0.4% to $63.29, while gold prices increased by 0.8% to $5,018.70 [3] - Silver prices rose by 2.5% to $78.830, whereas copper prices fell by 0.2% to $5.8705 [3] European Market - European shares were mostly higher, with the eurozone's STOXX 600 gaining 0.1% [4] - Spain's IBEX 35 Index rose by 0.4%, while London's FTSE 100 fell by 0.3% [4] - Germany's DAX increased by 0.5%, and France's CAC 40 rose by 0.1% during the session [4] Asian Market - Asian markets closed higher, with Japan's Nikkei jumping 3.89% [5] - Hong Kong's Hang Seng Index gained 1.76%, China's Shanghai Composite increased by 1.41%, and India's BSE Sensex rose by 0.58% [5]

Core Insights - The company reported a revenue of $5.3 billion for Q1, reflecting a 0.4% increase, with New Becton, Dickinson and Company growing by 2.5% due to broad-based growth across key markets [2][16] - The adjusted gross margin was 53.4%, and adjusted EPS was $2.91, both exceeding expectations due to strong revenue performance and operational execution [1][20] - The company is closing a significant transaction with Waters, which is expected to unlock substantial value for shareholders, including a $4 billion cash distribution [5][21] Financial Performance - The adjusted operating margin was 21.2%, down 240 basis points year-over-year, primarily due to tariffs and increased commercial investments [20] - Free cash flow for the quarter was $548 million, with a conversion rate improving to 66% from 59% in the prior year [20] - The company returned approximately $550 million to shareholders, including dividends and share buybacks [20] Business Segments and Growth - The new segment structure includes Medical Essentials, Connected Care, Biopharma Systems, Interventional, and Life Sciences, with financials recast to reflect this reorganization [3] - The Connected Care segment, particularly APM, saw high single-digit growth, while Pharmacy Automation experienced double-digit growth [17][18] - Biopharma Systems reported low single-digit growth, with double-digit growth in biologics, offset by lower demand for vaccine products [18] Strategic Initiatives - The company is focused on enhancing its capital allocation strategy, prioritizing share repurchases, dividends, and targeted tuck-in M&A to increase return on invested capital [6] - The company has identified three key trends shaping healthcare: the rise of smart connected devices, the shift towards lower-cost care settings, and the growth in technologies addressing chronic diseases [7] - The company aims to improve operational excellence through a simplified manufacturing network, reducing global sites by nearly half [15][42] Innovation and Market Position - The company has built multiple growth platforms, each with billion-dollar potential, positioning itself at the center of key healthcare trends [8] - The innovation pipeline has been strengthened with a reallocation of $50 million towards high-growth platforms, aiming to reduce development times and accelerate product launches [12][55] - The company has a strong competitive position, with over 90% of revenues driven by recurring consumables and leading positions in more than 90% of the markets served [9][10] Guidance and Future Outlook - For fiscal 2026, the company expects low single-digit revenue growth, with a positive currency impact estimated at about 120 basis points [21][22] - Adjusted EPS guidance for fiscal 2026 is set between $12.35 and $12.65, reflecting approximately 6% growth at the midpoint [22] - The company anticipates Q2 revenue growth of approximately 2%, consistent with full-year guidance assumptions [23]

Financial Data and Key Metrics Changes - The company achieved high single-digit reported revenue growth and low double-digit adjusted EPS growth in Q4, with sales growing 7% on a reported basis and 6% in constant currency [6][8] - Adjusted EPS grew low double digits to $4.53, while GAAP EPS was $3.77 [8][31] - For the full year, sales grew 7% on both a reported and constant currency basis, with adjusted EPS growing 11% to $13.13 [9][31] Business Line Data and Key Metrics Changes - Recurring revenue grew 9%, driven by chemistry growth, while instruments grew 3%, led by high single-digit LCMS growth [8][30] - Chemistry revenue grew 12% for the full year, contributing to the overall growth [9][31] - Instrument sales grew 5% for the full year, with high single-digit LCMS growth offset by a low single-digit decline in TA system sales [31][32] Market Data and Key Metrics Changes - Pharma revenue grew 9%, with high single-digit growth across Americas and Europe and low double-digit growth in Asia [13][31] - Industrial grew 6%, while academic and government declined 1% [31] - In China, sales grew 9% for the year, driven by strong performance in biotech and CDMOs [14][32] Company Strategy and Development Direction - The company completed the acquisition of BD's Biosciences and Diagnostic Solutions business, aiming to strengthen its position in high-growth adjacencies and enhance operational execution [6][17] - The strategic roadmap laid out five years ago continues to advance, with a focus on innovation and high-volume testing opportunities [7][9] - The company plans to expand its idiosyncratic growth driver framework from three to five drivers, adding biologics and informatics [14][15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to deliver strong growth in 2026, with a guidance range of 5.5%-7% for organic constant currency revenue growth [35][36] - The company anticipates approximately $3 billion in revenue contribution from the acquired business in 2026, with a risk-adjusted growth assumption of 2.5% [26][35] - Management highlighted the importance of improving operational execution and pricing discipline to enhance revenue synergies [47][57] Other Important Information - The company expects to realize approximately $55 million of adjusted EBIT from cost synergies in 2026 and $50 million in revenue synergies [23][36] - Free cash flow totaled $677 million for the full year, with a net debt position of $820 million at year-end [34][36] Q&A Session All Questions and Answers Question: Concerns about BD results and recovery path - Management acknowledged several issues that emerged in Q4 impacting growth, emphasizing a focus on improving operational execution and leveraging new product launches for recovery [44][46] Question: Full year guidance and deceleration - Management clarified that the guidance reflects a prudent approach, incorporating potential headwinds and assuming mid-single-digit growth in China [54][55] Question: Synergy targets and operational excellence - Management confirmed a focus on achieving synergy targets through operational improvements and disciplined pricing strategies [66][70]

Core Viewpoint - Becton Dickinson has lowered its profit forecast for the fiscal year 2026, leading to a pre-market stock price decline of 3.7% [1] Group 1 - The company has adjusted its profit expectations for the fiscal year 2026 [1] - Following the announcement, Becton Dickinson's stock experienced a pre-market drop of 3.7% [1]

Financial Data and Key Metrics Changes - Total revenue for Q1 2026 was $5.3 billion, reflecting a 0.4% increase year-on-year, with New BD growing by 2.5% [5][18] - Adjusted gross margin was 53.4%, down 140 basis points from the prior year, primarily due to tariffs [20] - Adjusted EPS was $2.91, a decrease of 15.2% year-on-year, mainly impacted by tariffs [21] - Free cash flow for the quarter was $548 million, with a conversion rate of 66%, up from 59% in the prior year [22] Business Line Data and Key Metrics Changes - Medical Essentials experienced expected order timing dynamics and volume-based procurement in China, partially offset by share gains in the US [18] - Connected Care delivered mid-single-digit growth, led by high single-digit growth in APM [18] - Biopharma Systems grew low single digits, with double-digit growth in biologics, particularly GLP-1s, offset by lower vaccine demand [19] - Interventional and surgery segments both delivered solid mid-single-digit growth, with strong performance in Advanced Tissue Regeneration [19] Market Data and Key Metrics Changes - The US market showed solid growth in the BD Vacutainer portfolio, while challenges persisted in China due to market dynamics [18] - Alaris performance was slightly ahead of expectations despite a revenue decline due to tough comparisons to the prior year [19] - The Life Sciences segment declined due to US point-of-care headwinds and market dynamics in China [20] Company Strategy and Development Direction - The company is focused on a balanced capital allocation strategy, prioritizing share repurchases and tuck-in M&A in high-growth markets [8][9] - Key trends shaping the future of healthcare include the rise of smart devices, the shift towards lower-cost care settings, and the growth in chronic disease technologies [9][10] - The company aims to enhance its commercial capabilities and operational excellence through its "Excellence Unleashed" strategy, focusing on competing, innovating, and delivering [11][16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the trajectory of the business, with core growth drivers remaining intact [27] - The company anticipates low single-digit revenue growth for New BD in fiscal 2026, with a positive currency impact expected [23] - Management acknowledged known headwinds in 10% of the portfolio but emphasized strong fundamentals in the remaining 90% [33] Other Important Information - The company is set to close a significant transaction with Waters, receiving a $4 billion cash distribution, with plans to allocate $2 billion for share repurchases and $2 billion for debt paydown [8][24] - The company has reduced its manufacturing network by nearly half, enhancing operational efficiency and cost management [16][56] Q&A Session Summary Question: Guidance for Q2 revenue and EPS - Management indicated that Q2 guidance reflects modest timing benefits and that core growth drivers remain intact, with no ramp expected from Q1 to Q2 [27][28] Question: Structural changes affecting mid-single-digit growth - Management confirmed confidence in the portfolio, noting strong performance in high-growth areas despite known headwinds [33] Question: Impact of Alaris and vaccines in China - Management expects Alaris to step up in 2027, with vaccines anticipated to have a smaller revenue impact moving forward [40][42] Question: M&A opportunities under New BD strategy - The company remains focused on tuck-in M&A that is accretive to revenue and EPS, with a robust pipeline in high-growth sectors [78][80] Question: Pricing environment and potential for price premiums - Management noted a stable pricing environment with slight positive pricing expected outside of China, anticipating improvements as VBP dynamics lessen [91]

Becton, Dickinson and Company (NYSE:BDX) Q1 2026 Earnings call February 09, 2026 08:00 AM ET Company ParticipantsJayson Bedford - Managing Director in Equity ResearchPatrick Wood - Managing Director in Equity ResearchRick Wise - Managing DirectorShawn Bevec - Senior Vice President of Investor RelationsTom Polen - Chairman, CEO and PresidentTravis Steed - Managing Director in Equity ResearchVitor Roque - SVP and Interim CFOConference Call ParticipantsJoanne Wuensch - Managing Director and Senior Equity Resea ...

Financial Data and Key Metrics Changes - Total revenue for Q1 2026 was $5.3 billion, reflecting a 0.4% increase year-on-year, with new BD growing by 2.5% [4][15] - Adjusted gross margin was 53.4%, down 140 basis points from the previous year, primarily due to tariffs [17] - Adjusted EPS was $2.91, a decrease of 15.2% year-on-year, driven mainly by the impact of tariffs [17][20] - Free cash flow for the quarter was $548 million, with a conversion rate of 66%, up from 59% in the prior year [18] Business Line Data and Key Metrics Changes - Medical Essentials saw mixed performance, with expected order timing dynamics affecting MDS, but continued share gains in the US vascular access management portfolio [15] - Connected Care delivered mid-single-digit growth, led by APM with high single-digit growth [15] - Biopharma Systems grew low single digits, with double-digit growth in biologics, particularly GLP-1s, offset by lower vaccine demand [16] - Interventional business experienced solid mid-single-digit growth, driven by high single-digit growth in UCC and double-digit growth in PureWick [16] Market Data and Key Metrics Changes - Growth was pressured by market dynamics in China, particularly in the life sciences segment, which declined due to headwinds in US point-of-care and difficult comparisons from the prior year [17] - The company expects the value-based procurement (VBP) in China to impact 80% of its portfolio by the end of 2026, with a projected headwind of about 250 basis points for the full year [36] Company Strategy and Development Direction - The company is focused on a balanced capital allocation strategy, prioritizing share repurchases and tuck-in M&A in high-growth markets [6][73] - The transformation into a pure-play med tech company is supported by divesting non-core assets and enhancing its portfolio through strategic acquisitions [7] - The company identified three key trends shaping healthcare: the rise of smart devices, the shift towards lower-cost care settings, and the growth in technologies addressing chronic diseases [7] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the trajectory of the business, maintaining a prudent approach to guidance for fiscal 2026, expecting low single-digit revenue growth [20] - The company anticipates that pricing dynamics will improve as VBP in China abates, potentially leading to positive pricing in the future [85] - Management highlighted strong execution in commercial initiatives and a robust innovation pipeline, which are expected to drive future growth [9][68] Other Important Information - The company completed a significant transaction with Waters, receiving a $4 billion cash distribution, with plans to allocate $2 billion for share repurchases and $2 billion for debt paydown [6][19] - The company has reduced its manufacturing network by nearly half, which is expected to lower costs and improve operational efficiency [13][50] Q&A Session Summary Question: Guidance for Q2 revenue and EPS - Management confirmed that Q2 guidance reflects modest timing benefits and remains aligned with Q1 performance, with no fundamental changes expected [23][44] Question: Structural changes affecting mid-single-digit growth - Management reassured that the fundamentals across the majority of the portfolio remain strong, with continued investment in high-growth areas [28] Question: Impact of Alaris and vaccines in China - Management indicated that Alaris is expected to improve in 2027, while vaccine impacts are anticipated to lessen over time [36][71] Question: Pricing environment and innovation impact - Management noted a stable pricing environment with slight positive trends expected, particularly as new product innovations are introduced [84][85]

Core Viewpoint - Medical device maker Becton Dickinson has revised its profit forecast for fiscal year 2026, reflecting the impact of the separation and sale of its biosciences and diagnostics unit [1] Group 1 - The company has adjusted its outlook to account for the recent strategic changes involving its biosciences and diagnostics unit [1]