Medical technology major
Becton, Dickinson and Company
) posted adjusted earnings per share of $1.42 for the first
quarter of fiscal 2014, topping the Zacks Consensus Estimate of
$1.29 as well as the year-ago earnings of $1.35 by 5.2%.
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Adjusted earnings exclude medical device excise tax that came
into effect in January 2013. Reported earnings per share
increased 1.5% to $1.37 from $1.35 per share in the fiscal 2013
Revenues in the quarter went up 6.1% to $2,015 million, also
exceeding the Zacks Consensus Estimate of $1,979 million. In
constant currency, revenues grew 6.7% in the quarter. The
increase in revenues was attributable to favorable timing of
orders in the BD Medical and BD Diagnostics segments.
Operating income fell 3.6% to $378 million from $392 million in
the first quarter of fiscal 2013. Consequently, operating margin
declined 180 basis points (bps) to 18.8% from 20.6% a year ago.
Revenues in the U.S. went up 2.3% to $849 million. International
revenues grew 8.9% to $1.17 billion in the quarter, driven by
continued strength in emerging markets and sales of
safety-engineered products apart from strong growth in Western
Segments in Detail
Revenues in the
segment rose 8.2% (8.6% on a constant currency basis) globally to
$1.06 billion, due to strong medical surgical systems, diabetes
care, and pharmaceutical systems sales. Both the medical surgical
and pharmaceutical systems were positively affected by favorable
timing of orders.
Global revenues in the
segment scaled up 3.1% (4.2% in constant currency) to $672
million, due to international expansion in both the preanalytical
systems and diagnostic systems businesses. The growth in
diagnostic systems was favorably affected by timing of flu
Revenues in the
swelled 5.4% (5.7% in constant currency) to $279 million
globally, on the back of continued strength in emerging markets,
clinical reagents sales and solid instrument placements in both
the U.S. and Western Europe.
Fiscal 2014 Guidance
For fiscal 2014, Becton, Dickinson continues to expect revenue
growth in the range of 4.0 to 5.0%, both in reported and constant
currency. The company also anticipates adjusted earnings per
share between $6.19 and $6.22 for the year (compared with the
prior range of $6.16 to $6.22), reflecting a year-over-year
growth of 6.5-7.0% over fiscal 2013. The current Zacks Consensus
Estimate of $6.21 lies within the guided range.
In constant currency, adjusted earnings per share are now
anticipated to grow between 9.0 and 9.5%, or between 9.5 and
10.0% excluding the incremental impact of the medical device tax.
Becton Dickinson maintained its plan to repurchase about $450
million of its common stock in fiscal 2014.
Becton, Dickinson continues on a positive note with its first
quarter and fiscal 2014 results exceeding expectations on both
fronts. While the domestic market is largely penetrated, the
company's robust growth in the international markets is a
material upside. Further, penetration in emerging markets should
bolster the top line for Becton Dickinson.
However, Becton, Dickinson faces a wide range of competitors in
each of its three business segments. It faces different groups of
highly-focused competitors in each market in which its products
Currently, Becton, Dickinson currently carries a Zacks Rank #3
(Hold). Some better-ranked stocks in the medical/dental supply
Align Technology Inc.
Cardinal Health, Inc.
). All of them carry a Zacks Rank #2 (Buy).