Becton, Dickinson and Company (BDX) is set to report fourth-quarter fiscal 2014 results on Nov 4. Last quarter, Becton, Dickinson reported earnings of $1.68 per share, which were in line with the Zacks Consensus Estimate. We note that on an average, Becton, Dickinson has delivered a positive earnings surprise of 6.52% through the last four quarters.
Let’s see how things are shaping up prior to this announcement.
Factors LIkely to Influence This Quarter
Becton, Dickinson maintains its focus on expansion into overseas markets, in particular, emerging markets, which accounted for about 60% of sales in the third quarter of fiscal 2014. Overseas revenues increased 6.7% driven by sustained growth in emerging markets and robust safety-engineered product sales.
However, Becton, Dickinson continues to be challenged by downward pressure on demand for health care products. Hospital and lab-testing expenditure remain as areas of concern. Moreover, high unemployment rates in the U.S. have dampened the frequency of doctors’ visits.
Earnings Whispers?
Our proven model does not conclusively show that Becton, Dickinson is likely to beat earnings this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank of #1, 2 or 3 for this to happen. That is not the case here as you will see below.
Zacks ESP: Becton, Dickinson currently has an earnings ESP of 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate stand at $1.65.
Zacks Rank: Becton, Dickinson has a Zacks Rank #3 (Hold) which increases the predictive power of ESP. However, the company’s ESP of 0.00% makes surprise prediction difficult.
On the other hand, we caution against stocks with Zacks Rank #4 and 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Here are some companies you may want to consider as our model shows they have the right combination of elements to post an earnings beat this quarter:
Palatin Technologies (PTN), with an earnings ESP of +25.00% and a Zacks Rank #2 (Buy).
Henry Schein (HSIC), with an earnings ESP of +1.53% and a Zacks Rank #2.
Alnylam Pharmaceuticals (ALNY), with an earnings ESP of +9.23% and a Zacks Rank #2.
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