C.R. Bard (BCR) Beats on Q3 Earnings & Sales, Guides Up

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C.R. Bard Inc.BCR reported adjusted earnings of $2.28 in the third quarter of 2015, which exceeded the Zacks Consensus Estimate by 4 cents and improved 6% from the year-ago quarter. Adjusted earnings were also better than management's guided range of $2.21 to $2.25 per share.

CR Bard Inc. - Earnings Surprise | FindTheBest

The year-over-year improvement was primarily driven by higher net sales, which increased 4.3% to $865.7 million, well ahead of the Zacks Consensus Estimate of $854 million.

At constant currency (cc), net sales increased 8% from the year-ago quarter, which surpassed management's guided range of 6% to 7%. Organic growth was approximately 8.3%, better than the guided range of 6.5% to 7.5%.

U.S. net sales improved 7%, while International sales increased 10% at cc in the reported quarter. At cc, Europe and other international territories reported sales increases of 7% and 18%, respectively. The year-over-year growth at Europe was driven by strong demand from endovascular radiology in PICCs.

Sales in Japan declined 1%, while emerging market revenues grew double digit. The decline in Japan can be attributed to inventory fluctuations.

Gore royalty revenues totaled approximately $38.4 million in the quarter.

Segment Details

Vascular product sales increased 8.2% year over year (13% at cc) to $250.5 million. Excluding the royalty payment and divestiture of Electrophysiology products, vascular sales were up 16%. Sales in the U.S. jumped 18%, whereas international sales were up 14%.

Sales from surgical graft were up 4% in the quarter. The Endovascular business sales grew 18%, excluding the royalty payment from Gore. Within the Endovascular business, peripheral PTA line sales jumped 48% driven by accelerating demand for the Lutonix drug-coated balloon in the U.S.

Sales from biopsy products climbed 14%, driven by healthy growth across the international businesses. Sales from the Stent business declined 3% owing to pricing pressure and Vena cava filter line sales also declined 8%.

Urology sales inched up 1.3% year over year (5% at cc) to $212.3 million. Sales in the U.S. increased 5%, while improving 4% internationally.

Within Urology, sales from the basic drainage business increased 6% globally and 7% in the U.S. I.C. Foley's sales were up 3% globally and 1% in the U.S. Sales from the continence business decreased 3% in the quarter. Temperature management product sales grew at a double-digit rate.

Sales from urological specialties were up 1%, including the Brachytherapy product line, which was down 1% globally. StatLock catheter stabilization line decreased 4% in the reported quarter.

Oncology sales increased 4.2% (8% at cc) to $239.3 million. Sales were up 5% in the U.S. and 15% outside the U.S. PICC sales grew 13% globally with continued strong performance in the U.S., Europe and the emerging markets. Port line sales were down 1% year over year due to price reductions.

Meanwhile, sales from the Vascular Access ultrasound product line were up 1%. Lastly, sales from the dialysis catheter business rose 12% in the quarter.

Surgical Specialties sales increased 3.1% (6% at cc) to $139.8 million. U.S. sales increased 6%, while international sales were up 4%. Sales at the bio-surgery business grew in double-digit in the quarter.

Sales from the soft tissue repair business grew 7%. Within soft tissue, synthetic hernia products sales grew 6% from the year-ago quarter. Moreover, hernia fixation business sales improved 2%, while natural tissue products increased 14% on a year-over-year basis. Performance irrigation business declined 20% in the reported quarter.

Sales from the Other product line increased 0.8% on a year-over-year basis to $23.8 million.


For the fourth quarter of 2015, C.R. Bard projects adjusted earnings in the range of $2.38 to $2.42 per share. The company expects sales growth to be flat to down 1% for the quarter, at cc. Organic growth is expected in the range of 5% to 6%.

C.R. Bard raised its full-year 2015 earnings guidance, which is now expected in the range of $9.03 to $9.07 (up from $8.95 to $9.05). Organic sales are forecasted at 6.5%.

Our Take

C.R. Bard has an extensive product portfolio and a solid pipeline which, we believe, are the key growth factors. The early market acceptance of the company's Lutonix DCB has been impressive. In our opinion, the company will witness an expanded adoption of this technology as the market continues to mature.

C.R. Bard's continued investments in the emerging markets has strengthened its position internationally and is increasingly delivering accretive returns. We believe investments in product development and strong growth from emerging markets will help the company boost revenues in the long run.

However, the company continues to witness significant pricing pressure, which is a headwind. Also, unfavorable foreign currency will continue to hurt top- and bottom-line growth. Stiff competition and sluggish hospital spending environment are the added concerns. Moreover, the recent acquisition of the Japanese joint venture will hurt margins in the near term.

Stocks to Consider

Currently, C.R. Bard carries a Zacks Rank #3 (Hold).

Better-ranked stocks in the same space are Intuitive Surgical ISRG , Masimo Corp. MASI and Natus Medical BABY . All the three stocks carry a Zacks Rank #1 (StrongBuy).

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BARD C R INC (BCR): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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