Becton Dickinson (NYSE: BDX) free cash flow jumps 42.5% but guided EPS growth cools

Posted by on Nov 5th, 2026

What happened

Becton, Dickinson and Company (NYSE: BDX) grew fiscal 2026 free cash flow 42.5% to $2.93 billion and guided to slower earnings growth.

The company, which uses the name BD, reported results on Nov. 5 for the fiscal year that ended Sept. 30. Revenue from continuing operations was $19.46 billion, up 4.9% as reported and 3.9% excluding currency effects. Adjusted diluted earnings per share rose 6.7% to $12.70 from $11.90.

The fourth quarter was stronger. Revenue of $5.27 billion rose 5.4% as reported and 5.6% excluding currency. Adjusted EPS climbed 27.3% to $4.15 from $3.26 a year earlier.

All figures are for continuing operations. BD spun off its former Biosciences and Diagnostic Solutions business and combined it with Waters Corporation on Feb. 9. Prior periods were recast to match.

Key numbers

Metric Latest Change Source
FY26 free cash flow $2.93 billion from $2.06 billion, +42.5% SEC 8-K
FY26 revenue (continuing operations) $19.46 billion from $18.54 billion, +4.9% SEC 8-K
FY26 adjusted diluted EPS $12.70 from $11.90, +6.7% SEC 8-K
Q4 adjusted diluted EPS $4.15 from $3.26, +27.3% SEC 8-K
Free cash flow as a share of revenue 15.1% from 11.1%, +4.0 percentage points Calculated from SEC 8-K
FY27 adjusted diluted EPS guidance (vs. FY26 $12.70) $13.10 to $13.30 from $12.70, +3.1% to +4.7% Calculated from SEC 8-K

Read more: Becton, Dickinson and (BDX) company research

Why it matters

Cash is where the year improved most. OptimistFi's calculation puts free cash flow at 15.1% of revenue in fiscal 2026, up from 11.1% in fiscal 2025. BD kept more cash from each dollar of sales.

Cash from continuing operations rose 30.0% to $3.6 billion. Capital spending fell to $672 million from $715 million. A smaller drag from changes in operating assets and liabilities also helped. That drag was $50 million against $616 million a year earlier.

OptimistFi has argued that BD's installed base of regulated devices and consumables produces recurring revenue that funds capital returns. The stronger cash conversion fits that view. Slower guided growth tempers it.

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Where the cash went

Buybacks and debt reduction took much of it. BD repurchased $2.43 billion of stock in fiscal 2026, up from $1.00 billion a year earlier. It paid $1.16 billion in dividends against $1.20 billion.

Long-term debt stood at $13.42 billion on Sept. 30, down from $17.62 billion a year earlier. BD paid $2.70 billion of debt during the year. The cash flow statement shows a $3.92 billion distribution from the spin-off entity.

The fourth-quarter average diluted share count was 274.05 million, down from 287.12 million a year earlier.

What sits behind the earnings figures

GAAP results swung more than adjusted ones. Fourth-quarter GAAP diluted EPS from continuing operations more than doubled to $2.52 from $1.20. Operating income rose 92.5% to $1.03 billion.

One-time items sit inside those numbers. The quarter includes a $66 million benefit, mostly in cost of products sold, from refunds of tariffs imposed under the International Emergency Economic Powers Act. It also carries $45 million of net charges for product liability and other legal matters, against $232 million a year earlier. BD's reconciliation excludes these items from adjusted EPS.

Full-year restructuring costs include $450 million of non-cash asset impairments. Total diluted EPS fell to $4.09 from $5.82. Discontinued operations swung to a $271 million loss from $577 million of income.

Growth was uneven across segments. Interventional revenue rose 7.6% in the fourth quarter and BioPharma Systems rose 6.5%. Connected Care rose only 1.6%. Within it, Medication Management Solutions fell 2.3% as reported while Advanced Patient Monitoring rose 15.0%.

What fiscal 2027 guidance and the U.S. plan add

BD guided fiscal 2027 revenue growth to low single digits, both GAAP and excluding currency. It guided adjusted diluted EPS to $13.10 to $13.30. OptimistFi's calculation puts that at a rise of 3.1% to 4.7% over fiscal 2026, slower than the year just reported.

The EPS guide leaves out possible charges or gains such as intangible amortization, acquisition-related charges, separation-related costs and certain tax matters.

Separately, BD said it intends to invest $19 billion in the U.S. over several years. That includes capital, operational and supply chain investments, with $3 billion for manufacturing expansion. The agreement with the U.S. Government also gives relief from future tariffs under Section 232 on covered BD products and inputs.

That relief depends on the final scope of any future Section 232 actions and on BD meeting agreed milestones.

What's next

BD will hold its 2026 Investor Day on Dec. 10 at the New York Stock Exchange. The company says more information will follow. Management said it has confidence in the long-term growth, earnings and cash-flow potential of what it calls New BD.

A long-term growth framework above the low single-digit revenue guide would strengthen the case. Detail tying the $19 billion plan to the Section 232 milestones would show how much tariff relief BD has secured.

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Sources

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Originally published on OptimistFi, evidence-first equity research. More at optimistfi.com.