We reiterate our Neutral recommendation for
Becton, Dickinson and Company
). The company reported third-quarter fiscal 2012 earnings per
share from continuing operations of $1.52. It thereby missed the
Zacks Consensus Estimate of $1.53 per share.
The company stated net income of $326.9 million ($1.59 per
share). It includes $15.3 million (7 cents per share) from
discontinued operations pertaining to the sell-off of the Discovery
Labware unit of BD Biosciences by the end of calendar year
Becton Dickinson recorded third quarter revenues of $1,981
million, up 1.5% (or 4.9% in constant currency) year over year,
missing the Zacks Consensus Estimate of $2,018 million.
On a regional basis, domestic revenues inched up 1.1% year over
year to $837 million while overseas revenues moved up 1.7% (or 7.8%
in constant currency) to $1,144 million. Overseas sales were driven
by sustained growth in emerging nations and robust safety
We remain cautious about Becton Dickinson due to the lack of
major short-term catalysts. The rising demand for safety-needle
products (with higher price points and margins) was the primary
driver of the company's past growth. The growth rate is, however,
not expected to continue, given that the U.S. market is already
On the positive side, Becton Dickinson's preeminent global
healthcare products franchise is partly insulated from volatile
macroeconomic conditions and structural deficiencies elsewhere in
the healthcare delivery field.
Becton Dickinson faces a wide range of competitors, including
) in certain niches, in each of its three business segments. The
stock currently retains a Zacks #4 Rank, which translates into a
short-term Sell recommendation.
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