BD’s third quarter was marked by a strong positive market reaction, reflecting investor confidence in the company’s margin expansion and execution on commercial initiatives. Management credited the improvement to gains in gross and operating margins, driven by the BD Excellence operating system, and highlighted sequential revenue growth across multiple product lines. CEO Thomas Polen emphasized the impact of new product launches and ongoing investments in sales and marketing as pivotal to the quarter’s performance, noting, “The combination of these actions has already begun delivering results, as you saw play out in a number of key areas.”
Is now the time to buy BDX? Find out in our full research report (it’s free).
BD (BDX) Q2 CY2025 Highlights:
- Revenue: $5.51 billion vs analyst estimates of $5.48 billion (8.9% year-on-year growth, in line)
- Adjusted EPS: $3.68 vs analyst estimates of $3.40 (8.2% beat)
- Adjusted EBITDA: $1.63 billion vs analyst estimates of $1.58 billion (29.6% margin, 3.2% beat)
- The company reconfirmed its revenue guidance for the full year of $21.85 billion at the midpoint
- Management raised its full-year Adjusted EPS guidance to $14.38 at the midpoint, a 1.2% increase
- Operating Margin: 16%, up from 11.9% in the same quarter last year
- Constant Currency Revenue rose 9.9% year on year (2.9% in the same quarter last year)
- Market Capitalization: $56.17 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From BD’s Q2 Earnings Call
- Patrick Wood (Morgan Stanley) asked if RemainCo can sustain mid-single-digit growth post-separation. CEO Thomas Polen replied that recent trends in biologics, UCC, and APM are expected to continue, supported by ongoing investments in innovation and sales.
- Rick Wise (Stifel) questioned the sequential step down in operating margin guidance for the next quarter. CFO Christopher DelOrefice attributed it to timing of investments and increased tariff costs, emphasizing the margin strength from operational improvements.
- Larry Biegelsen (Wells Fargo) sought details on post-separation margin outlook and below-the-line items like tax rate. DelOrefice said operating margin is expected to be similar pre- and post-separation, with transitional service agreements offsetting stranded costs, and highlighted share buybacks as an EPS lever.
- Travis Steed (Bank of America) probed the long-term growth outlook for New BD and capital deployment post-separation. CEO Polen emphasized ongoing investment in innovation and margin improvement initiatives, while DelOrefice stressed prudent monitoring of macro factors and tariff mitigation.
- Robbie Marcus (JPMorgan) asked about drivers behind UCC’s double-digit growth and sustainability. CEO Polen detailed the success of PureWick products, expansion into home care, and a pipeline of product launches targeting new patient needs.
Catalysts in Upcoming Quarters
In the coming quarters, our analysts will monitor (1) the execution and closing timeline of the Waters transaction and resulting changes to BD’s business mix, (2) the pace of adoption for new launches like Pyxis Pro and the at-home HPV test, and (3) the impact of ongoing tariff mitigation efforts on margins. Progress in these areas will be crucial indicators of BD’s ability to sustain growth and navigate external headwinds.
BD currently trades at $196.07, up from $172.40 just before the earnings. In the wake of this quarter, is it a buy or sell? See for yourself in our full research report (it’s free).
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