Medical technology major
Becton, Dickinson and Company
) reported adjusted earnings per share of $1.68 for the third
quarter of fiscal 2014 ended Jun 30, 2014, reflecting a 9.1% rise
(or 7.8% in constant currency) over the prior-year level of $1.54.
Adjusted earnings per share were in line with the Zacks Consensus
The company reported net earnings of $326 million, up 11.6% from
$292 million in the third quarter of fiscal 2013. Net earnings per
share escalated 12.7% to $1.69 from $1.50 in the prior-year
Becton, Dickinson and Company - Earnings
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Revenues for the third quarter stood at $2,157 million, up 5.1% (or
4.6% in constant currency) year over year and easily surpassed the
Zacks Consensus Estimate of $2,140 million. The upside was driven
by strong performance in the Medical segment and continued
improvement in the Biosciences segment.
Domestic revenues (contributing 40.4% to overall revenues in the
quarter) inched up 2.7% year over year to $871 million while
overseas revenues increased 6.7% (or 6% in constant currency) to
$1,286 million. Overseas revenues continued to be driven by
sustained growth in emerging markets and robust safety-engineered
, global revenues moved up 5.4% (or 4.7% in constant currency) year
over year to $1,201 million in the quarter. Revenue growth was
driven by strong sales in the Medical Surgical Systems and
Pharmaceutical Systems units.
Within BD Medical, revenues from Medical Surgical Systems were up
5.2% (or 6% in constant currency) to $590 million. Diabetes Care
revenues increased 3.2% (or 3.6% in constant currency) to $258
million, while Pharmaceutical Systems revenues spiked 7% (or 3.4%
in constant currency) to $353 million.
, global revenues edged up 3.7% in both reported and constant
currency to $679 million. Strong sales in the Preanalytical Systems
unit were partially offset by ongoing softness in Women's Health
and Cancer in the U.S.
Within BD Diagnostics, Preanalytical Systems revenues rose 5.5% (or
5.9% in constant currency) to $364 million while Diagnostic Systems
revenues inched up 1.6% (or 1.4% in constant currency) to $315
Global revenues from the
unit increased 7.8% (or 6.6% in constant currency) to $277 million,
led by a favorable comparison to the prior year as well as solid
instrument placements and continued strength in emerging markets.
Gross profits improved 4.8% to $1,111 million from $1,060 million
in the prior-year quarter. However, gross margin declined
marginally by 10 basis points (bps) to 51.5% from 51.6% a year ago.
Consolidated operating costs and expenses increased 3.9% to $1,712
million, as Becton, Dickinson spent more on research and
development activities during the quarter. Operating earnings
increased 9.9% to $445 million while operating margin expanded 90
bps to 20.6% from 19.7% in the third quarter of fiscal 2013.
Fiscal 2014 Guidance
For fiscal 2014, Becton, Dickinson reaffirmed its adjusted earnings
per share guidance in the range of $6.22 to $6.25, which represents
year-over-year growth of 7.0-7.5%.
On a foreign currency-neutral basis, adjusted earnings per share
are expected to grow between 10.0 and 10.5%, or 11.0 and 11.5%
excluding the incremental impact of the medical device tax. The
current Zacks Consensus Estimate of $6.25 coincides with the higher
end of the guided range.
Becton, Dickinson continues to expect revenue growth in the range
of 4.0 to 5.0% for fiscal 2014. In constant currency, revenue
growth is expected between 4.5 and 5.0%.
Becton, Dickinson plans to repurchase about $450 million of its
common stock in fiscal 2014.
Becton, Dickinson strides forward on a positive note with its
fiscal 2014-third quarter earnings in line and revenues ahead of
expectations. Moreover, we appreciate the reaffirmed guidance for
the ongoing fiscal year.
Strengths in the Medical Surgical Systems as well as the
Preanalytical Systems unit continue to boost revenues. While the
domestic market is largely penetrated, the company's robust growth
in the international markets is a material upside. Further,
penetration in lucrative markets should bolster the top line for
However, Becton, Dickinson faces a number of competitors in each of
its three business segments. It faces different groups of
highly-focused competitors in each of its markets.
Currently, Becton, Dickinson carries a Zacks Rank #3 (Hold).
Better-ranked stocks in the medical/dental supply industry include
Align Technology Inc. (
), Bio-Reference Laboratories Inc. (
) and McKesson Corporation (
). All these stocks carry a Zacks Rank #2 (Buy).
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