Becton, Dickinson and Company BDX, popularly known as BD, reported third-quarter fiscal 2015 earnings of $2.05 per share, which beat the Zacks Consensus Estimate by a nickel and increased 17.1% from the year-ago quarter. Earnings per share (EPS) grew 34.3% at constant currency (cc).
Quarter Details
Revenues surged 55.6% at cc to $3.13 billion, which lagged the Zacks Consensus Estimate of $3.15 billion. On a comparable basis (including Carefusion figures) and at cc, revenues increased 2.4% from the year-ago quarter.
At cc, BD medical revenues surged 96.5% year over year to $2.21 billion. Medication and Procedural solution sales soared 52.2%, while Diabetes cure and Pharmaceutical revenues increased 3.4% and 8%, respectively. Medication management solutions and Respiratory solution (Carefusion’s division) revenues totaled $554 million and $232 million, respectively, in the quarter.
On a comparable basis and at cc, BD medical revenues increased 1.6%, primarily driven by robust sales in the Medication and Procedural Solutions and Pharmaceutical Systems units, partially offset by weak results from the Medication Management Solutions unit.
At cc, BD Lifesciences revenues increased 4.2% from the year-ago quarter to $921 million. Preanalytical Systems, Diagnostic Systems and BD Biosciences revenues advanced 4.1%, 3.7% and 5.1% on a year-over-year basis, respectively.
Total safety revenues improved 37.1% year over year to $731 million. U.S. revenues surged 40.4%, while international revenues were up 33.2% from the year-ago quarter.
Geographically, U.S. revenues increased a strong 96% to $1.71 billion, while International revenues were up 28.4% at cc to $1.43 billion.
Guidance
For fiscal 2015, at cc and including CareFusion, revenues are expected to increase approximately 28.5% to 29%. On a comparable basis and at cc, BD continues to estimate organic revenue growth at approximately 4.5%.
Meanwhile, adjusted EPS is expected in the range of $7.08 to $7.12 (up from the earlier guided range of $7 to $7.10) for 2015, which reflects year-over-year growth of 20% to 21% at cc.
Our Take
Unfavorable foreign exchange continues to hurt BD’s results and is expected to remain a potent headwind for the rest of 2015. Moreover, lower demand for health care products as well as higher hospital and lab-testing expenditures remain areas of concern.
Nevertheless, BD’s expanding product portfolio is a key catalyst in our view. The collaboration with Medtronic MDT, JDRF and The Leona M. and Harry B. Helmsley Charitable Trust on the research and development of the new insulin pump infusion set is also encouraging.
Meanwhile, the partnership with FlowJo will combine BD’s cytometry data acquisition software with FlowJo’s data analysis platform. This will facilitate the uploading of collected data from BD’s flow cytometers running on FACSDiva software, directly to FlowJo Enterprise. This will in turn help researchers manage data more effectively.
Further, the company’s expansion into overseas markets, particularly the emerging markets, is also a positive. Moreover, the CareFusion merger has opened up significant opportunities for BD. Also, the combined manufacturing footprint and operations along with lower overhead expenses should result in significant cost savings, going forward.
Stocks to Consider
Currently, Becton, Dickinson carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the same space include C.R. Bard BCR and DENTSPLY International XRAY. Both the companies carry a Zacks Rank #2 (Buy).
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