Core Insights - Becton, Dickinson and Company (BDX) reported adjusted earnings per share (EPS) of $3.68 for Q3 fiscal 2025, marking a 5.1% increase year over year and exceeding the Zacks Consensus Estimate by 7.6% [1][9] - Total revenues reached $5.51 billion, reflecting a 10.4% year-over-year growth and surpassing the Zacks Consensus Estimate by 0.5% [2][9] - The company experienced a gross margin expansion of 158 basis points to 47.8% and an adjusted operating profit increase of 25.2% to $1.02 billion [9][12] Revenue Breakdown - Adjusted revenues for Q3 fiscal 2025 were $5.51 billion, up 8.9% year over year on a reported basis, with 3% organic growth [3] - BD Medical segment revenues were $2.93 billion, up 14.4% year over year, driven by growth in Medication Management Solutions and Pharmaceutical Systems [5] - BD Life Sciences segment revenues totaled $1.25 billion, down 0.5% year over year, impacted by declines in Diagnostic Solutions and Biosciences [6] - BD Interventional segment generated revenues of $1.33 billion, up 7.2% year over year, supported by growth in Urology & Critical Care [7] Geographic Performance - U.S. revenues improved by 10% year over year to $3.18 billion, slightly below projections [10] - International revenues reached $2.33 billion, up 10.9% year over year, exceeding expectations [11] Margin and Expense Analysis - Gross profit increased by 14.2% year over year to $2.63 billion, with selling and administrative expenses rising by 10.4% [12][13] - Adjusted operating margin expanded by 219 basis points to 18.5% [13] Financial Position - Cash and cash equivalents at the end of Q3 fiscal 2025 were $757 million, up from $683 million in the previous quarter [14] - Total debt increased slightly to $19.34 billion from $19.27 billion [14] - Cumulative net cash from operating activities was $2.08 billion, down from $2.67 billion a year ago [15] Fiscal Guidance - BDX revised its full fiscal year revenue projection to between $21.8 billion and $21.9 billion, with an expected growth rate of 8.2-8.7% [16] - Adjusted EPS for fiscal 2025 is anticipated to be in the range of $14.30-$14.45, reflecting growth of 8.8-10% [18] Strategic Developments - BDX announced a definitive agreement to combine its BDB and DS business units with Waters Corporation, aiming to enhance its position in life sciences and diagnostics [20] - The BD Medical segment plans to invest $35 million in a Nebraska facility to support new production lines and operational efficiencies [20]

Core Insights - The healthcare industry is rebounding, with companies like Becton, Dickinson, and Company (BDX) showing strong financial performance, particularly in Q3 2025 [1] - BDX reported adjusted earnings per share of $3.68, exceeding the consensus estimate of $3.41, and sales of $5.51 billion, slightly above the consensus of $5.49 billion [1][2] Financial Performance - Revenues increased by 10.4% as reported, 8.5% adjusted for foreign exchange, and 3.0% organically [3] - GAAP gross margin improved by 160 basis points, while adjusted gross margin increased by 50 basis points [3] - GAAP operating income rose by 46.6%, and adjusted operating income increased by 11.3% [3] Segment Performance - **Medical Segment**: Sales increased by 14.4% to $2.93 billion, with strong performance in Medication Delivery Solutions, although impacted by an IV fluid shortage [4] - **Pharmaceutical Systems**: Continued growth driven by double-digit gains in Biologics, despite weaker demand for non-biologic products [5] - **Life Sciences**: Sales reached $1.25 billion, down 0.5%, with growth in Specimen Management but declines in Diagnostic Solutions [6][7] - **Interventional**: Sales increased by 7.2% to $1.33 billion, driven by strong growth in Advanced Tissue Regeneration and Peripheral Intervention [8][9] Guidance - BDX raised its fiscal 2025 adjusted earnings guidance to $14.30-$14.45, compared to the previous range of $14.06-$14.34, reflecting strong Q3 performance [11] - The company reaffirmed its organic revenue growth guidance of 3.0%-3.5%, with sales guidance of $21.8 billion-$21.9 billion [11] Stock Performance - BDX shares rose by 7.81% to $185.87 following the earnings report [12]

Financial Data and Key Metrics Changes - Revenue grew 8.5% to $5.5 billion, with 3% organic growth and new BD organic growth at 4% [7][24] - Adjusted gross margin reached 54.8%, up 50 basis points year over year, while adjusted operating margin increased to 25.8%, up 60 basis points year over year [7][31] - Adjusted diluted EPS was $3.68, exceeding expectations with a growth of 5.1% [7][31] Business Line Data and Key Metrics Changes - Pharm Systems improved sequentially to nearly 5% growth, with double-digit growth in Biologics [9][25] - APM delivered 13% pro forma growth, driven by strong commercial execution and new product innovation [26] - BD Life Sciences saw a low single-digit decrease in Biosciences and Diagnostic Solutions, but significant sequential positive momentum of approximately 250 basis points [28][30] Market Data and Key Metrics Changes - Total company organic growth was led by performance in the U.S. and Greater Asia outside of China, partially offset by challenges in China [24] - Research instruments improved in the U.S. and EMEA by approximately 40-80%, driven by the launch of FaxDiscover 88 [29] - BackTech utilization increased over 20 percentage points sequentially, exiting the quarter at over 80% of historic levels [30] Company Strategy and Development Direction - The company announced a definitive agreement to separate its Biosciences and Diagnostics business, which is expected to unlock significant shareholder value [6][11] - Focus on enhancing capital allocation with an emphasis on share buybacks and competitive dividends [12] - Continued investment in innovation and commercial execution, particularly in areas like UCC and new product launches [40][85] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate market headwinds and maintain organic growth [6][33] - Anticipated continued positive momentum in Q4, driven by APM's organic growth and improvements in BackTech [33] - The company expects to achieve its goal of a 25% operating margin by 2025, despite ongoing tariff impacts [34][60] Other Important Information - The company plans to use at least half of the $4 billion cash distribution from Waters for share buybacks [12] - BD Excellence operating system has significantly improved manufacturing productivity and reduced waste by over 35% [22] - The company is on track to complete a $1 billion share buyback by September, ahead of the original commitment [32] Q&A Session Summary Question: Growth outlook for RemainCo business - Management is pleased with performance across various segments and expects continued growth in mid-single digits for RemainCo [36][38] Question: Operating margin guidance for Q4 - Management indicated a slight sequential step down in operating margins due to timing of investments, but overall performance remains strong [44][46] Question: Insights on fiscal 2026 margins and EPS growth - Management expects healthy margins post-separation and anticipates a better outlook for tariffs in 2026, with a projected impact of around $275 million [60][62] Question: Trends in urology and interventional business - Urology growth is driven by ongoing trends and innovation, with no one-time factors affecting performance [78][80] Question: Increased SG&A investment in Q4 - Management confirmed that increased investments are aimed at supporting innovation and commercial execution, setting up for future growth [84][86]

Financial Data and Key Metrics Changes - Revenue grew 8.5% to $5.5 billion, with 3% organic growth and new BD organic growth at 4% [6][22] - Adjusted gross margin reached 54.8%, up 50 basis points year over year, and adjusted operating margin was 25.8%, up 60 basis points year over year [6][30] - Adjusted diluted EPS was $3.68, exceeding expectations with a growth of 5.1% [6][30] Business Line Data and Key Metrics Changes - BD Medical's Pharm Systems showed sequential improvement with 4.8% growth, driven by double-digit growth in Biologics [23] - APM delivered 13% pro forma growth, supported by strong commercial execution and new product innovation [24] - BD Life Sciences experienced low single-digit decline in Biosciences and Diagnostic Solutions, but showed significant sequential positive momentum [27] Market Data and Key Metrics Changes - Total company organic growth was led by the U.S. and Greater Asia outside of China, partially offset by challenges in China [23] - Research instruments improved by approximately 40-80% sequentially in the U.S. and EMEA, driven by the launch of FaxDiscover 88 [28] - BackTech utilization increased over 20 percentage points sequentially, exiting the quarter at over 80% of historic levels [29] Company Strategy and Development Direction - The company announced a definitive agreement to separate its Biosciences and Diagnostics business, which is expected to unlock significant shareholder value [5][9] - Focus on enhancing capital allocation with an emphasis on share buybacks and competitive dividends post-separation [10] - Continued investment in innovation and commercial execution to drive growth, particularly in areas like UCC and new product launches [39][66] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving organic revenue growth despite market headwinds, particularly in China and certain sub-segments [8][32] - The company reaffirmed its organic revenue guidance for the year and raised its earnings guidance by $0.18 at the midpoint [8][33] - Management highlighted the importance of BD Excellence in driving margin expansion and operational efficiency [21][60] Other Important Information - The company plans to use at least half of the $4 billion cash distribution from Waters for share buybacks, with the remainder for debt repayment [10] - The company expects a full-year 2026 tariff impact of around $275 million, an improvement from previous expectations [34][60] Q&A Session Summary Question: Growth outlook for RemainCo business - Management indicated that they expect stable mid-single-digit growth for RemainCo, driven by strong performance across various segments and continued investments in innovation [36][38] Question: Operating margin guidance for Q4 - Management acknowledged a slight sequential step down in operating margins due to timing of investments, but emphasized strong overall performance and margin management [44][46] Question: Fiscal 2026 margin outlook - Management stated that post-separation operating margins would remain healthy, with continued benefits from BD Excellence and a favorable tariff outlook [52][56] Question: Capital deployment strategy post-separation - Management highlighted a focus on reinvesting in growth opportunities and maintaining strong capital allocation strategies, including share buybacks [63][66] Question: Trends in urology business - Management confirmed that the double-digit growth in urology is a continuation of strong momentum, driven by ongoing innovation and market expansion [75][78]

Company Performance - Becton Dickinson (BDX) reported quarterly earnings of $3.68 per share, exceeding the Zacks Consensus Estimate of $3.42 per share, and showing an increase from $3.5 per share a year ago, representing an earnings surprise of +7.60% [1] - The company posted revenues of $5.51 billion for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 0.47%, and up from $4.99 billion year-over-year [2] - Over the last four quarters, Becton Dickinson has surpassed consensus EPS estimates four times and topped consensus revenue estimates three times [2] Stock Outlook - Becton Dickinson shares have declined approximately 24% since the beginning of the year, contrasting with the S&P 500's gain of 7.9% [3] - The current consensus EPS estimate for the upcoming quarter is $3.99 on revenues of $5.9 billion, and for the current fiscal year, it is $14.17 on revenues of $21.83 billion [7] Industry Context - The Medical - Dental Supplies industry, to which Becton Dickinson belongs, is currently ranked in the top 28% of over 250 Zacks industries, indicating a favorable outlook compared to the bottom 50% [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact Becton Dickinson's stock performance [5]

Q3 FY25 Financial Performance - Adjusted revenue increased by 8.9% to $5.509 billion, with organic revenue growth of 3.0%[37] - Adjusted diluted EPS grew by 5.1% year-over-year to $3.68[26, 37] - Adjusted operating margin increased by 60 bps year-over-year to 25.8%[26] - Free cash flow decreased by 25% year-over-year to $1.667 billion YTD, impacted by increased inventory and tariff payments[39] Segment Performance - BD Medical revenue increased by 14.0% FXN to $2.927 billion, with 3.2% organic growth[26, 28] - BD Life Sciences revenue decreased by 1.1% FXN to $1.254 billion[26, 31] - BD Interventional revenue increased by 6.8% FXN to $1.328 billion[26, 33] FY25 Guidance - The company reaffirmed organic revenue growth guidance of 3.0% to 3.5%[17, 41] - Adjusted diluted EPS guidance increased to $14.30 to $14.45, reflecting 9.4% year-over-year growth at the midpoint[17, 41] - Estimated total company revenue is projected to be approximately $21.8 billion to $21.9 billion[41]

[BD Reports Third Quarter Fiscal 2025 Financial Results](index=1&type=section&id=BD%20Reports%20Third%20Quarter%20Fiscal%2025%20Financial%20Results) [Financial and Business Highlights](index=1&type=section&id=Financial%20and%20Business%20Highlights) BD reported strong Q3 FY2025 results with 10.4% revenue growth and raised full-year adjusted EPS guidance Q3 FY2025 Key Financial Metrics | Metric | Value | Growth (Reported) | | :--- | :--- | :--- | | Revenue | $5.5 billion | 10.4% | | Adjusted Revenue (FXN) | - | 8.5% | | Organic Revenue | - | 3.0% | | GAAP Diluted EPS | $2.00 | - | | Adjusted Diluted EPS | $3.68 | - | | GAAP Operating Income | - | 46.6% | | Adjusted Operating Income | - | 11.3% | - The company raised its full-year adjusted diluted EPS guidance to **$14.30 - $14.45**, an increase of **$0.18** at the midpoint, while reaffirming organic revenue growth guidance[5](index=5&type=chunk) - Announced a definitive agreement to combine BD's Biosciences & Diagnostic Solutions business with Waters Corporation to create a new life science and diagnostics leader[6](index=6&type=chunk) - Key business developments include a **$35 million investment** in a Nebraska facility for BD® PosiFlush™ production, the first clinical trial using the BD Libertas™ Wearable Injector, and the global launch of the BD FACSDiscover™ A8 Cell Analyzer[6](index=6&type=chunk)[11](index=11&type=chunk) [Third Quarter Fiscal 2025 Operating Results](index=2&type=section&id=Third%20Quarter%20Fiscal%202025%20Operating%20Results) [Overall and Geographic Performance](index=2&type=section&id=Overall%20and%20Geographic%20Performance) BD's Q3 FY2025 revenue reached $5.51 billion with 10.4% reported growth across U.S. and International markets Q3 FY2025 Overall Performance vs. Q3 FY2024 | Metric (in millions, except per share) | Q3 2025 | Q3 2024 | Reported Change | Organic Revenue Change | | :--- | :--- | :--- | :--- | :--- | | Revenues | $5,509 | $4,990 | 10.4% | N/A | | Adjusted Revenues | $5,509 | $5,057 | 8.9% | 3.0% | | Reported Diluted EPS | $2.00 | $1.68 | 19.0% | N/A | | Adjusted Diluted EPS | $3.68 | $3.50 | 5.1% | N/A | Q3 FY2025 Geographic Revenue (in millions) | Region | Q3 2025 | Q3 2024 | Reported Change | FX Neutral Change | | :--- | :--- | :--- | :--- | :--- | | United States | $3,181 | $2,891 | 10.0% | 10.0% | | International | $2,328 | $2,098 | 11.0% | 9.8% | | **Total Revenues** | **$5,509** | **$4,990** | **10.4%** | **9.9%** | [Segment Results](index=3&type=section&id=Segment%20Results) BD Medical and Interventional segments drove Q3 growth, while BD Life Sciences experienced a slight decline Q3 FY2025 Segment Revenue (in millions) | Segment | Q3 2025 | Q3 2024 | Reported Change | Organic Revenue Change | | :--- | :--- | :--- | :--- | :--- | | BD Medical | $2,927 | $2,558 | 14.4% | 3.2% | | BD Life Sciences | $1,254 | $1,260 | (0.5)% | (1.1)% | | BD Interventional | $1,328 | $1,240 | 7.2% | 6.8% | [BD Medical Segment](index=3&type=section&id=BD%20Medical%20Segment) BD Medical segment revenue grew 14.4% reported, driven by APM acquisition and mid-single-digit growth in MMS and PS - Performance reflects revenue contribution from the APM acquisition, **mid-single-digit growth** in MMS and PS, and **low-single-digit growth** in MDS[12](index=12&type=chunk) - MMS performance was driven by continued strength in Infusion Systems. PS performance was led by sustained **double-digit growth** in Biologics[15](index=15&type=chunk) [BD Life Sciences Segment](index=3&type=section&id=BD%20Life%20Sciences%20Segment) BD Life Sciences segment revenue declined 0.5% reported, primarily due to Diagnostic Solutions and Biosciences - Performance reflects declines in Diagnostic Solutions (DS) and Biosciences (BDB), partially offset by **low single-digit growth** in Specimen Management (SM)[13](index=13&type=chunk) - In DS, BD BACTEC™ utilization improved sequentially, exiting the quarter at over **80% of historical levels**. BDB saw strong early traction from the new FACSDiscover™ A8 analyzer[15](index=15&type=chunk) [BD Interventional Segment](index=3&type=section&id=BD%20Interventional%20Segment) BD Interventional segment achieved strong 7.2% reported growth, driven by double-digit UCC and mid-single-digit SURG and PI - Performance reflects **double-digit growth** in Urology & Critical Care (UCC) and **mid-single-digit growth** in Surgery (SURG) and Peripheral Intervention (PI)[14](index=14&type=chunk) - UCC performance was driven by strong **double-digit growth** in the PureWick™ franchise. PI growth was led by the Rotarex™ Atherectomy System[15](index=15&type=chunk) [Full Year Fiscal 2025 Outlook](index=4&type=section&id=Assumptions%20and%20Outlook%20for%20Full%20Year%20Fiscal%202025) [Updated Guidance](index=4&type=section&id=Updated%20Guidance) BD raised its full-year FY2025 adjusted diluted EPS guidance to $14.30-$14.45, reaffirming organic revenue growth Fiscal 2025 Guidance Comparison | Metric | Guidance as of Aug 7, 2025 | Guidance as of May 1, 2025 | | :--- | :--- | :--- | | Organic Revenue Growth (FXN) | 3.0% to 3.5% | 3.0% to 3.5% | | Adjusted Diluted EPS | $14.30 to $14.45 | $14.06 to $14.34 | | Adjusted Diluted EPS Growth | 8.8% to 10.0% | ~7.0% to 9.1% | - The company raised its full-year adjusted EPS guidance by **$0.18** at the midpoint, reflecting strong Q3 operating performance and planned investments in Q4[16](index=16&type=chunk) - The estimated impact of translational foreign currency is now expected to be about **neutral** to adjusted EPS for the full fiscal year, an improvement from previous expectations[17](index=17&type=chunk) [Consolidated Financial Statements](index=8&type=section&id=Consolidated%20Financial%20Statements) [Condensed Consolidated Income Statements](index=8&type=section&id=Condensed%20Consolidated%20Income%20Statements) BD's Q3 FY2025 revenues grew 10.4% to $5.51 billion, with nine-month net income declining 9.2% Q3 FY2025 Income Statement Highlights (in millions) | Account | Q3 2025 | Q3 2024 | % Change | | :--- | :--- | :--- | :--- | | REVENUES | $5,509 | $4,990 | 10.4% | | OPERATING INCOME | $882 | $602 | 46.6% | | NET INCOME | $574 | $487 | 17.9% | | Diluted EPS | $2.00 | $1.68 | 19.0% | Nine Months FY2025 Income Statement Highlights (in millions) | Account | Nine Months 2025 | Nine Months 2024 | % Change | | :--- | :--- | :--- | :--- | | REVENUES | $15,949 | $14,741 | 8.2% | | OPERATING INCOME | $1,882 | $1,775 | 6.0% | | NET INCOME | $1,185 | $1,305 | (9.2)% | | Diluted EPS | $4.10 | $4.49 | (8.7)% | [Condensed Consolidated Balance Sheets](index=10&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) BD's total assets decreased to $54.9 billion as of June 30, 2025, primarily due to reduced cash and investments Balance Sheet Highlights (in millions) | Account | June 30, 2025 | Sept 30, 2024 | | :--- | :--- | :--- | | Cash and equivalents | $735 | $1,717 | | TOTAL CURRENT ASSETS | $8,997 | $10,468 | | TOTAL ASSETS | $54,902 | $57,286 | | Long-term debt | $17,531 | $17,940 | | TOTAL LIABILITIES | $29,430 | $31,396 | | TOTAL SHAREHOLDERS' EQUITY | $25,472 | $25,890 | [Condensed Consolidated Statements of Cash Flows](index=11&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Nine-month operating cash flow decreased to $2.08 billion, resulting in a $1.06 billion net cash decrease Nine-Month Cash Flow Highlights (in millions) | Activity | Nine Months 2025 | Nine Months 2024 | | :--- | :--- | :--- | | NET CASH PROVIDED BY CONTINUING OPERATING ACTIVITIES | $2,076 | $2,660 | | NET CASH USED FOR INVESTING ACTIVITIES | ($324) | ($1,570) | | NET CASH (USED FOR) PROVIDED BY FINANCING ACTIVITIES | ($2,808) | $1,960 | | NET (DECREASE) INCREASE IN CASH | ($1,058) | $3,000 | [Supplemental Information and Reconciliations](index=12&type=section&id=Supplemental%20Information%20and%20Reconciliations) [Supplemental Revenue Information](index=12&type=section&id=Supplemental%20Revenue%20Information) Detailed revenue breakdown highlights Q3 growth drivers including Advanced Patient Monitoring, Urology & Critical Care - For the three months ended June 30, 2025, in the U.S., the Advanced Patient Monitoring unit, acquired in September 2024, contributed **$176 million** in revenue. Urology and Critical Care grew **12.4%** to **$334 million**[36](index=36&type=chunk) - For the three months ended June 30, 2025, internationally, Medication Management Solutions revenue grew **11.4%** reported (**9.6% FXN**) to **$179 million**, and Urology and Critical Care grew **12.7%** reported (**10.8% FXN**) to **$88 million**[39](index=39&type=chunk) - For the nine months ended June 30, 2025, total company revenue for the Medication Management Solutions unit grew **6.0%** to **$2.5 billion**, while the Biosciences unit declined **3.9%** to **$1.07 billion**[51](index=51&type=chunk) [Reconciliation of GAAP to Non-GAAP Measures](index=18&type=section&id=Reconciliation%20of%20GAAP%20to%20Non-GAAP%20Measures) Reconciliations adjust Q3 reported revenue to $5.23 billion organic revenue and GAAP diluted EPS to $3.68 adjusted Q3 FY2025 Revenue Reconciliation (in millions) | Description | Q3 2025 | Q3 2024 | % Change (FXN) | | :--- | :--- | :--- | :--- | | Total Reported Revenues | $5,509 | $4,990 | 9.9% | | Adjusted Revenues | $5,509 | $5,057 | 8.5% | | Organic Revenue | $5,231 | $5,057 | 3.0% | Q3 FY2025 EPS Reconciliation | Description | Per Share Amount | | :--- | :--- | | Reported Diluted EPS | $2.00 | | Purchase accounting adjustments | $1.34 | | Integration & Restructuring costs | $0.33 | | Other adjustments (net) | $0.01 | | **Adjusted Diluted EPS** | **$3.68** | Q3 FY2025 Gross Margin Reconciliation | Margin | Value | | :--- | :--- | | GAAP Gross Margin % | 47.8% | | Adjusted (non-GAAP) Gross Margin % | 54.8% |

Core Insights - BD reported strong financial results for Q3 of fiscal 2025, with revenues of $5.509 billion, reflecting a 10.4% increase compared to the previous year [4][9] - The company raised its full-year adjusted diluted EPS guidance to between $14.30 and $14.45, indicating a growth of 9.4% at the midpoint [9][16] - BD announced a strategic agreement to combine its Biosciences and Diagnostic Solutions business with Waters Corporation, aiming to enhance its position in the life sciences and diagnostics market [2][10] Financial Performance - Revenues for Q3 2025 were $5.509 billion, up from $4.990 billion in Q3 2024, marking a 10.4% increase [4][9] - Adjusted diluted EPS rose to $3.68, a 5.1% increase from $3.50 in the prior year [4][9] - GAAP diluted EPS increased to $2.00, up 19.0% from $1.68 [4][9] Segment Performance - BD Medical segment revenues reached $2.927 billion, a 14.4% increase from $2.558 billion [8][38] - BD Life Sciences segment revenues were $1.254 billion, slightly down by 0.5% from $1.260 billion [11][38] - BD Interventional segment revenues increased by 7.2% to $1.328 billion from $1.240 billion [11][38] Geographic Performance - U.S. revenues were $3.181 billion, a 10.0% increase from $2.891 billion [6][38] - International revenues grew by 11.0% to $2.328 billion from $2.098 billion [6][38] Strategic Initiatives - The company plans to invest $35 million in a Nebraska facility to enhance production capabilities for its PosiFlush™ Prefilled Flush Syringe [10] - BD Life Sciences submitted an FDA application for the at-home BD Onclarity™ HPV Assay, which includes advanced self-collection technology [10] - The company achieved its Scope 1 and 2 greenhouse gas emissions reduction target for FY 2024, reflecting its commitment to sustainability [10]

Core Viewpoint - Waters Corporation reported strong Q2 performance with revenue reaching $771 million, a year-over-year increase of 8.9%, and a sequential increase of 16.6%. The company also announced a transformative acquisition plan for BD, expecting significant value creation through cost and revenue synergies [4][6][16]. Financial Performance - In Q2, Waters' revenue was $771 million (approximately RMB 5.56 billion), with a year-over-year growth of 8.9% and a sequential growth of 16.6%. The growth was primarily driven by the instrument business, which saw a 4% increase at constant currency, with high single-digit growth in liquid chromatography (LC) and mass spectrometry (MS) [6][7]. - The recurring revenue also grew by 11% at constant currency, reflecting strong demand for high-end analytical instruments, particularly in the Chinese biopharmaceutical sector [10][12]. Regional and Segment Performance - Waters experienced significant growth across different regions, with Asia achieving a 14% increase, Europe growing by 8%, and the Americas only increasing by 2% due to a 20% decline in the TA segment [8]. - Notably, the Chinese market showed remarkable performance with revenue of $117 million, a year-over-year increase of 17% and a sequential increase of 28.9%, driven by strong demand for instrument replacements in quality control and new drug development [10][12]. Strategic Initiatives - The company attributed its strong performance to successful execution of business strategies, innovative product launches, and targeted growth plans. The Alliance iS system saw a threefold increase in sales year-over-year, while other innovations like Xevo TQ Absolute+XR and MaxPeak Premier also experienced significant sales growth [15][16]. - Waters announced the acquisition of BD Biosciences & Diagnostic Solutions, positioning it as a transformative move expected to generate $200 million in cost synergies by the third year post-acquisition and $290 million in additional sales by the fifth year [16][17]. Market Concerns - Following the acquisition announcement, Waters' stock price fell by 11.5%, indicating market skepticism regarding the high valuation of $17.5 billion for BD's divested business, which corresponds to a 19x EBITDA multiple, above the industry average of 15x [21][24]. - Concerns also arose regarding the potential challenges of integrating BD's business, given the differences in business models and regulatory environments, which could complicate the realization of expected synergies [26][28]. Conclusion - Waters' Q2 performance reflects robust operational capabilities and a solid foundation for future growth. However, the market's skepticism regarding the integration of BD's business and the realization of synergies poses a significant challenge for the company moving forward [29].

Core Insights - Becton Dickinson and Company (BDX) is set to report its third-quarter fiscal 2025 results on August 7, with expectations of revenue growth despite a slight decline in earnings per share (EPS) [2][11][14]. BD Medical - The BD Medical segment is anticipated to see a revenue increase of 17.7% year over year, driven by the launch of the HemoSphere Alta Advanced Monitoring Platform and the BD neXus infusion pump [4][6][11]. - Management has confirmed progress in the Connected Care strategy, including 510(k) clearance for BD Alaris enhancements [5]. BD Life Sciences - The BD Life Sciences segment is projected to experience a revenue decline of 4.2% year over year, attributed to unfavorable market dynamics and slower recovery in blood culture testing [8][9]. - The global launch of the BD FACSDiscover A8 Cell Analyzer is expected to enhance product adoption and drive revenues [7]. BD Interventional - The BD Interventional segment's revenues are expected to rise by 2.9% year over year, supported by sustained demand and the launch of the Phasix ST hernia patch [11][13]. - The Phasix ST Umbilical Hernia Patch is noted as the first fully absorbable hernia patch specifically for umbilical hernias [12]. Financial Estimates - The overall revenue estimate for Q3 fiscal 2025 is $5.48 billion, reflecting a 9.9% increase from the previous year, while EPS is expected to decrease by 2.3% to $3.42 [11][14]. - The company has a forward 12-month price-to-earnings (P/E) ratio of 12.3X, which is lower than the industry average of 16.2X, indicating potential for growth [20][21]. Strategic Developments - BD plans to invest over $35 million to expand prefilled flush syringe manufacturing, which is expected to enhance production capacity [22][25]. - The company has submitted an application for a new at-home HPV test and received FDA clearance for the BD Veritor System for COVID-19, indicating ongoing innovation [26]. - A definitive agreement with Waters Corporation aims to combine their Biosciences & Diagnostic Solutions business, enhancing BD's strategic focus [27]. Market Performance - BD's shares have increased by 8.3% over the past three months, outperforming its peers in the Medical - Dental Supplies sector [17][19]. - The company is trading at a discount compared to its peers, suggesting potential for future growth if it aligns more closely with market performance [21][31].