Medical technology major
Becton, Dickinson and Company
) reported first-quarter fiscal 2013 earnings per share from
continuing operations of $1.35, reflecting a beat of 9.8% over
the Zacks Consensus Estimate.
The company reported net income of $625.4 million ($3.13 per
share), which includes $355.2 million ($1.78 per share) from
Quarter in Detail
Becton Dickinson recorded first-quarter revenues of $1,900.2
million, up 3.7% (up 5.2% in constant currency) year over year,
sailing past the Zacks Consensus Estimate of $1,864 million.
On a geographic basis, domestic revenues (contributing 43.7% in
the first quarter) inched up 3% year over year to $830.1 million
while overseas revenues increased 4.3% (up 7% in constant
currency) to $1,070.1 million. Overseas revenues were driven by
sustained growth in emerging markets and robust safety product
At BD Medical, global revenues moved up 3.5% (up 5.1% in constant
currency) year over year to $983.4 million in the quarter, driven
by healthy revenues from Diabetes Care and higher revenues from
safety-engineered offerings in the international market.
Within BD Medical, revenues from Medical Surgical Systems were up
2.6% (up 3.9% in constant currency) year over year to $535.9
million. Diabetes Care sales increased 7.5% (up 9.1% in constant
currency) to $242.8 million, while Pharmaceutical Systems
revenues were up 1.2% (up 4% in constant currency) to $204.6
At BD Diagnostics, global revenues were up 5% (up 6.1% in
constant currency) year over year to $651.9 million on account of
growth in expansion in overseas markets and an early, burdensome
flu season. Preanalytical Systems revenues rose 5.7% (up 6.9% in
constant currency) to $334.8 million while Diagnostic Systems
sales were up 4.3% (up 5.3% in constant currency) to $317.2
Global revenues from the BD Biosciences unit improved 1.7% (up
3.3% in constant currency) year over year to $264.9 million, led
by strong instrument placements in the domestic market. This
segment is solely comprised of Cell Analysis following the
decision to divest Discovery Labware.
Gross margin expanded 210 basis points (bps) to 52.9% in the
reported quarter. Consolidated operating costs and expenses
increased marginally 0.9% year over year to $1,508.1 million, as
Becton Dickinson spent more on both selling and administrative
expenses and on R&D. However, operating margin improved 220
bps to 20.6% in the first quarter.
Based on encouraging first-quarter results, Becton Dickinson
revised its guidance for fiscal 2013. It now envisages reported
sales growth for fiscal 2013 in the range of 3.5% to 4% compared
with the prior guidance of 2% to 3%. The company forecasts
constant currency revenue growth in the range of 4% to 4.5%
compared with 3.5% to 4.5% earlier. The current Zacks Consensus
Estimate of $7,943 million implies a year-over-year growth of
over 3%, trailing the company's expectation.
Becton Dickinson now expects reported earnings per share from
continuing operations for fiscal 2013 in a band of $5.69 and
$5.72 versus the earlier outlook of $5.58 and $5.64. The
projection implies year-over-year constant currency growth of
7.5%-8% for fiscal 2013 or 10.5% -11% after accounting for the
medical device tax implemented in January 2013.
The current Zacks Consensus Estimate of $5.65 is below the
company's guidance. Further, Becton Dickinson plans to repurchase
$500 million of its shares in fiscal 2013, subject to market
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Becton Dickinson started fiscal 2013 on a positive note with its
first-quarter results exceeding expectations. Moreover, the
upward revision in guidance for the ongoing fiscal reflects
positive driving events.
While the domestic market is largely penetrated, the company's
robust growth in the international market is a material upside.
Further penetration in lucrative markets should bolster the
top-line for Becton Dickinson which serves a market that is
partly insulated from volatile macroeconomic conditions.
In light of these facts, the estimate revision trend for fiscal
2013 reflects a bullish sentiment for Becton Dickinson.
Accordingly, the stock carries a Zacks Rank #2 (Buy). Other
medical stocks such as
Smith & Nephew
), carrying a Zacks Rank #1 (Strong Buy) are also expected to do
well and warrant a look.