Becton, Dickinson and Company (BDX) Q3 2024 earnings summary

Executive summary

• Achieved 5.2% organic revenue growth year-over-year in Q3 FY24, with strong volume and share gains across the portfolio and robust performance in Alaris, PureWick, and biologics.

• GAAP diluted EPS rose 23.5% to $1.68; adjusted diluted EPS increased 18.2% to $3.50, reflecting strong margin and cash flow performance.

• Announced $4.2 billion acquisition of Edwards Lifesciences' Critical Care product group, expected to close by year-end 2024 and be immediately accretive to margins and earnings.

• Free cash flow more than doubled year-to-date to $2.2 billion, with conversion above 80% and over $1 billion returned to shareholders.

• Surpassed FY23 Scope 1 and 2 GHG emissions reduction targets, achieving an 18% reduction from FY19 baseline.

Financial highlights

• Q3 FY24 adjusted revenue was $5.1B, up 5.2% organically year-over-year; reported revenue was $4.99B, up 2.3%.

• Adjusted operating margin improved by 220 bps to 25.2% year-over-year; gross margin increased 170 bps to 54.3%.

• Net income for Q3 was $487M, up 19.6% year-over-year; operating income rose to $602M.

• Free cash flow for the first nine months was $2.24B, up 106% year-over-year, with 82% conversion.

• Net leverage improved to 2.4x; cash and short-term investments at $5.3B.

Outlook and guidance

• FY24 organic revenue growth expected at 5.0–5.25%, with adjusted diluted EPS guidance raised to $13.05–$13.15.

• Adjusted operating margin guidance raised to over 24% for the full year.

• FY25 expected to deliver double-digit EPS growth, with 10% as a starting point, and operating margin exceeding 25%.

• Guidance reflects strong margin performance and includes headwinds from the sale of the Surgical Instrumentation platform and FX impact.

• Management expects continued macroeconomic headwinds, especially in China, labor costs, and supply chain constraints.