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UPDATE: Becton Dickinson 4Q Net Jumps 12% As Sales Climb

(Adds details on results and outlook, executive comments, share price.)

By Jon Kamp

Of DOW JONES NEWSWIRES

Becton Dickinson & Co.'s (BDX) fiscal fourth-quarter earnings rose 12% with help from growth in the company's medical and diagnostics businesses and sales of flu-related products.

The medical-products company also improved its earnings outlook for the new fiscal year after a low initial estimate issued in late July sent the company's stock into a dive. The fiscal 2010 guidance is still below Becton's long-term growth targets, but Chief Executive Edward J. Ludwig said the company expects to get there over time.

"We are confident that our strategy and our solid track record of execution will put us back on track," he said on a conference call with analysts Wednesday.

He reiterated the company's long-term goals of growing per-share earnings by 10% to 12% per year while growing sales by 7% to 9%.

Shares of the Franklin Lakes, N.J., recently traded down 16 cents to $69.75.

For the quarter ended Sept. 30, the company reported earnings of $317.2 million, or $1.29 a share, up from $282.2 million, or $1.12 a share, a year earlier. Earnings from continuing operations rose to $1.25 from $1.11.

Analysts surveyed by Thomson Reuters had projected, on average, earnings of $ 1.25 per share in the recent quarter.

Revenue climbed 4.7% to $1.9 billion, exceeding company and Wall Street expectations. Sales were up about 8%, excluding the impact of foreign currency rates.

Gross margin rose to 51.9% from 51.4%.

Ludwig cited growth in the company's medical and diagnostics businesses as contributors in the recent quarter. The company, which makes such products as syringes, needles and alcohol swabs, also noted $55 million in flu-related orders in the quarter.

The medical segment--by far Becton's largest--had an 8% increase in sales, and its diagnostics segment had a 5% climb. However, the biosciences business, which makes systems used in laboratories and has been pinched by the economic slowdown, saw revenue drop 5%.

"Demand in the U.S. for capital equipment in the research and clinical segments continued to be impacted by funding constraints," Becton said in a release.

Currency rates unfavorably impacted all three of the company's main business segments.

Looking ahead, Becton expects adjusted earnings from continuing operations for the new fiscal year to rise by 1% to 3% from adjusted earnings of $4.95 in 2009. That implies 2010 earnings in a range of $5 to $5.10 per share.

Analysts had forecast earnings of $5.09 per share in fiscal 2010.

Officials noted that earnings will be pinched this year by investments in an upgraded corporate software system and increased pension expenses. Excluding the impact of foreign currency rates, the company sees earnings up 7% to 9% this year, which compares with the initial 7% forecast given in July.

Sales in fiscal 2010 are seen rising about 6%, or 5% to 6% excluding the expectation of a favorable currency impact.

-By Jon Kamp, Dow Jones Newswires; 617-654-6728; jon.kamp@dowjones.com

(Nathan Becker contributed to this report.)

  (END) Dow Jones Newswires
  11-04-091232ET
  Copyright (c) 2009 Dow Jones & Company, Inc.