Becton, Dickinson(US:BDX)2025-05-01 12:00Financial Data and Key Metrics Changes - Revenues grew 6% or 0.9% organically, which was below expectations, primarily due to market dynamics in Life Sciences and a slower return to normal levels in blood culture testing [6][12] - Adjusted gross margins increased to 54.9%, up 190 basis points year over year, driven by BD Excellence initiatives [7][26] - Adjusted diluted EPS was $3.35, reflecting a growth of 5.7% [26][30] Business Line Data and Key Metrics Changes - Biosciences faced challenges due to reduced global research funding, impacting instrument sales, while reagent sales continued to grow [9][11] - Diagnostics experienced softness in the Bactech Blood Culture business, with a slower recovery in testing levels [11][12] - Farm Systems returned to growth in Q2, driven by biologics and increased orders for GLP-1s [13][24] Market Data and Key Metrics Changes - Total company organic growth was led by the U.S., Greater Asia (excluding China), and Latin America, while EMEA declined and China saw a double-digit decrease [24] - The company adjusted its full-year revenue guidance to expect 3% to 3.5% organic growth due to market dynamics [12][29] Company Strategy and Development Direction - The company is focused on navigating the near-term environment while positioning itself for long-term value through strategic investments [6][19] - BD plans to invest $2.5 billion in U.S. manufacturing over the next five years to strengthen its position in the healthcare system [15][18] - The separation process for the Biosciences and Diagnostics business is on track, with strong interest in the assets [19][85] Management's Comments on Operating Environment and Future Outlook - Management expressed concerns over the volatility in research funding and its impact on sales, particularly in the Life Sciences segment [6][77] - The company remains committed to mitigating tariff impacts and expects to absorb $90 million in tariff expenses for FY 2025 [17][30] - Future guidance includes total revenue growth of 7.8% to 8.3% and organic growth of 3% to 3.5% for the remainder of the fiscal year [29][30] Other Important Information - BD Excellence initiatives are seen as a key driver for margin expansion and growth investments in R&D and commercial programs [8][22] - The company is actively managing its supply chain to mitigate tariff impacts and has implemented cost containment measures [18][72] Q&A Session Summary Question: Clarification on tariff impact - The $0.25 EPS impact from tariffs is a net number after mitigation efforts, and the situation remains fluid with ongoing adjustments [33][36] Question: Expectations for organic growth in the second half - The company expects organic growth to improve sequentially, with Q3 around 3% and Q4 expected to exceed 5% due to easier comparisons and key growth drivers [39][51] Question: Breakdown of organic sales growth adjustments - The adjustment reflects known headwinds in China and market-driven factors, with significant impacts from BDB and research spending [54][56] Question: Actions regarding tariffs and mitigation - The company is employing multiple strategies, including inventory positioning and sourcing alternatives, to mitigate tariff impacts [64][66] Question: Confidence in guidance amid market changes - Management acknowledged the challenges but emphasized strong execution on earnings and the ability to navigate macro dynamics effectively [75][82] Question: Update on Life Sciences separation process - The separation remains on schedule with strong interest in the assets, and details will be shared in the summer [85][86]