On Jun 27, we have updated our research report on Becton, Dickinson and Company (BDX). Becton, Dickinson continues to enjoy growing international sales, especially in emerging markets. However, we are concerned about challenging conditions in demand for healthcare products and certain macroeconomic headwinds.
Becton, Dickinson maintains its focus on expansion into overseas markets, in particular, emerging markets, which accounted for about 24.5% of sales in the second quarter of fiscal 2014. In particular, growth in safety needles in emerging markets is a bright spot.
Becton, Dickinson recorded second-quarter revenues of $2,072 million, up 3.6% (or 5.1% in constant currency) year over year. On a geographic basis, domestic revenues (contributing 39.9% to overall revenues in the quarter) inched up 0.2% year over year to $826 million while overseas revenues increased 5.9% (or 8.5% in constant currency) to $1,246 million.
However, Becton, Dickinson continues to be challenged by downward pressure on demand for health care products. Hospital and lab-testing expenditure remain areas of concern. High unemployment rates in the U.S. have dampened requirement for doctors’ visits.
In the fiscal 2014-second-quarter, Becton, Dickinson posted a 10.1% rise in adjusted earnings per share to $1.53, beating the Zacks Consensus Estimate by 3 cents. For fiscal 2014, Becton, Dickinson raised its adjusted earnings per share guidance to the range of $6.22 to $6.25 from the prior range of $6.19 to $6.22.
The upgraded earnings guidance represented year-over-year growth of 7.0–7.5%. The current Zacks Consensus Estimate of $6.25 coincided with the upper-end of the guided range.
Becton, Dickinson continues to expect revenue growth in the range of 4.0 to 5.0% for fiscal 2014. In constant currency, revenue growth is expected between 4.5 and 5.0%.
Currently, Becton, Dickinson carries a Zacks Rank #3 (Hold). Some better-ranked stocks worth reckoning in the medical/dental supply industry include Bio-Reference Laboratories Inc. (BRLI), Milestone Scientific Inc. (MLSS) and Steris Corp. (STE). All these stocks carry a Zacks Rank #2 (Buy).
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