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Becton, Dickinson (BDX) Q1 Earnings Beat, Revenues Rise Y/Y

Becton, Dickinson and Company BDX, also known as BD, reported first-quarter fiscal 2020 earnings per share (EPS) of $2.65, which beat the Zacks Consensus Estimate of $2.63. The bottom line however dropped 1.9% on a year-over-year basis and fell 0.4% at constant currency (cc).

The Zacks Rank #4 (Sell) company raked in revenues of $4.23 billion, surpassing the Zacks Consensus Estimate of $4.17 billion. The reported figure improved 1.6% from the year-ago quarter. At cc, revenues rose 2.5%.

Segment Details

BD Medical

In the quarter under review, the company reported worldwide revenues of $2.09 billion, down 2.1% from the year-ago quarter and 1.1% at cc. Per management, the segment's results were offset by year-over-year declines in the Medication Management Solutions and Diabetes Care units.

BD Life Science

Worldwide revenues in the segment totaled $1.12 billion, up 6.3% year over year and 6.4% at cc. Per management, the upside was driven by solid performance in the Diagnostic Systems and Biosciences units.

BD Interventional

This segment generated worldwide revenues of $1.01 billion, up 4.3% from the year-ago quarter. At cc, revenues grew 5% on strong performance by the Surgery, Urology and Critical Care and Surgery sub-units.

Becton, Dickinson and Company Price, Consensus and EPS Surprise

 

Becton, Dickinson and Company price-consensus-eps-surprise-chart | Becton, Dickinson and Company Quote

Geographic Results

US

In the fiscal first quarter, revenues in the United States improved 1.8% to $2.43 billion. Per management, growth in the United States was driven by solid show by the BD Medical, BD Life Sciences and the Interventional units.

International

Revenues outside the United States grossed $1.80 billion, up 1.2% from the year-ago quarter. At cc, revenues at the segment grew 3.4%. Per management, International revenue growth was driven by strength in China and the Asia-Pacific region.

Margin Analysis

In the quarter, gross profit amounted to $2 billion, up 0.3% from the prior-year quarter tally. Gross margin was 46.8%, down 60 bps from the prior-year quarter.

Operating income in the quarter grossed $501 million, down 43.6% from the year-ago quarter. As a percentage of revenues, operating margin in the quarter was 11.9%, down from the year-ago quarter’s 21.3%.

Adjusted operating income amounted to $587 million, down 8.6% from the year-ago figure. Adjusted operating margin was 13.9%, down 150 bps.

Guidance Lowered

BD now expects fiscal 2020 revenues to increase 1.5-2.5% year over year and 2.5-3.5% at cc, compared with the previously-stated range of 4-4.5% and 5-5.5% at cc. The Zacks Consensus Estimate for the metric is pegged at $18.03 billion.

Adjusted EPS is now expected between $11.90 and $12.10, suggesting growth of 4-5.5%. This compares with the earlier-projected range of $12.50 and $12.65. The Zacks Consensus Estimate for the same stands at $12.57.

Wrapping Up

BD exited the fiscal first quarter on a strong note. Meanwhile, solid performance by the core BD Life Sciences and Interventional segments instills optimism. Domestic revenues increased year over year in the quarter under review, driven by segmental strength. Growth in China and APAC is another positive.

Meanwhile, softness in the core BD Medical unit is disheartening. Also, a drop in gross and operating margins raises concern. Unfavorable foreign currency impacted BD’s quarterly bottom line. The company also lowered its fiscal 2020 guidance.

Earnings of Other MedTech Majors at a Glance

Some better-ranked stocks in the broader medical space which reported solid results this earnings season are Stryker Corporation SYK, Accuray Incorporated ARAY and IDEXX Laboratories, Inc. IDXX. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Stryker delivered fourth-quarter 2019 adjusted EPS of $2.49, beating the Zacks Consensus Estimate by 1.2%. Fourth-quarter reported revenues of $4.13 billion surpassed the Zacks Consensus Estimate by 0.7%. The company carries a Zacks Rank #2 (Buy).

Accuray reported second-quarter fiscal 2020 adjusted EPS of a penny, comparing favorably with the Zacks Consensus Estimate of a loss of 7 cents. Net revenues of $98.8 million outpaced the Zacks Consensus Estimate by 0.3%. The company sports a Zacks Rank #1.

IDEXX Laboratories reported fourth-quarter 2019 adjusted EPS of $1.04, which beat the Zacks Consensus Estimate of 91 cents by 14.3%. Revenues were $605.4 million, surpassing the Zacks Consensus Estimate by 0.9%. The company carries a Zacks Rank of 2.

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