Becton, Dickinson and Company BDX, popularly known as BD, is set to report fourth-quarter fiscal 2015 results on Nov 4. Last quarter, the company reported earnings of $2.05 per share, which beat the Zacks Consensus Estimate by a nickel. Notably, BD has posted a positive earnings surprise of 3.97% on an average over the last four quarters.
Let’s see how things are shaping up for this announcement.
Factors at Play
Of late, BD has been focused on growing via strategic partnerships and acquisitions. Partnerships with FlowJo Medtronic and the recently completed acquisition of San Francisco-based Cellular Research will help the company gain better market traction.
Moreover, the Carefusion merger has opened up significant opportunities for BD. The merger is also expected to deliver cost benefits for the company in the fourth quarter and beyond.
Notably, unfavorable foreign exchange is a major headwind for BD as the company announces fourth-quarter results. Nevertheless, management raised adjusted earnings guidance for full-year 2015 encouraged by the CareFusion merger and strong third-quarter performance. Adjusted earnings for 2015 are now expected in the range of $7.08 to $7.12, up from the previously guided range of $7.00 to $7.10.
Meanwhile, management is focused on expanding the BD MAX assay portfolio. The BD MAX Enteric Parasite Panel, which recently received FDA approval, is a significant addition to the BD MAX system. In addition, BD and Seegene have come together to develop multiplex real-time PCR reagents for the BD MAX System. The new additions to the BD MAX system have opened up strong growth opportunities for the company.
Earnings Whispers
Our proven model does not conclusively show that BD is likely to beat earnings this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here as you will see below.
Zacks ESP: BD has an Earnings ESP of 0.00%. That is because both the Most Accurate estimate and the Zacks Consensus Estimate stand at $1.90.
Zacks Rank: BD carries a Zacks Rank #3 which increases the predictive power of ESP; but when combined with a 0.00% ESP, it makes surprise prediction difficult.
We caution against stocks with a Zacks Ranks #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:
AmSurg Corp AMSG with earnings ESP of +8.79% and a Zacks Rank #1.
Intra-Cellular Therapies Inc. ITCI with earnings ESP of 10.61% and a Zacks Rank #1.
Opko Health Inc. OPK with earnings ESP of +100.00% and a Zacks Rank #2.
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