Becton, Dickinson and Co. raised its full-year fiscal 2026 outlook Wednesday after posting better-than-expected third-quarter results and detailing a strategy refresh ahead of a December investor day.
The medical-device maker said organic revenue growth in fiscal Q3 came in at 4.4%, with roughly 90% of its portfolio growing at high single digits or better. It lifted full-year guidance to the high end of low single-digit growth, up from its prior midpoint.
Chairman and CEO Tom Polen attributed much of the improvement to the tail end of a challenging period driven by Alaris, a discontinued IV pump line that created a 100-basis-point headwind in Q3 and Q4 of fiscal 2026. In fiscal 2027, management expects the Alaris comparison to weigh another 200 basis points, with next-year sales guidance around $100 million. Once that effect disappears after 2027, Becton anticipates returning to mid-single-digit growth.
CFO Vitor Roque pointed to a sequential margin expansion of 300 to 400 basis points in Q4, building on gross-margin improvement of about 1,000 basis points over three years in the advanced patient monitoring segment. That business also saw its U.S. sales team grow 15% in fiscal 2026.
China continues to weigh on results. Revenue from China has fallen to about 4% of total—down from 7% before the life sciences spin-off to Waters in February 2026—and is projected to drop to roughly 3% in fiscal 2027. Recent quarters saw revenue decline around 10%, with negative price impact from value-based procurement exceeding $130 million.
Polen outlined the updated "Excellence Unleashed" strategy across three pillars: improve commercial execution and pricing, expand the product pipeline, and drive operational and margin gains. The PureWick urinary incontinence device, which has posted more than 40 consecutive quarters of double-digit growth, remains on track toward a $1 billion revenue goal by 2030. Upcoming iterations include a wearable mobile format and a version for patients with cognitive disabilities.
In regenerative medicine, Becton's Tepha acquisition relies on its P4HB biodegradable platform. The Phasix hernia mesh, which fully degrades in 18 months, carries eight-year clinical data showing recurrence rates comparable to permanent synthetic mesh. Expansions are underway into international plastic surgery indications tied to GLP-1 weight loss, a parastomal hernia indication expected in fiscal 2027, and three breast space trials.
Pharmaceutical Systems grew mid-single digits in Q3, driven by biologics at double-digit rates and GLP-1 products growing above 20%. The vaccines segment declined from about $450 million to $300 million, representing an estimated 20% to 30% of Pharmaceutical Systems revenue weakness.
Meanwhile, recurring revenue now accounts for more than 90% of total BD revenue, and 95% of surgeries in the U.S. involve a BD device. The PureWick Veterans Affairs channel is running at over $1 million monthly.
On capital allocation, approximately $2 billion from the Waters transaction funded share repurchases in fiscal 2026, with an additional $250 million completed in Q1. Waters is valued at about $20 billion based on its stock price. BD pays a dividend yielding 2.36%, marking 55 consecutive years of increases.
Incremental selling investments totaled about $40 million beyond normal levels in fiscal 2026. U.S. specimen management grew 14% in Q3, aided by a competitor supply disruption.
Becton will hold its analyst day on December 10, 2026.
