Becton Dickinson and Company BDX, popularly known as BD, is scheduled to report third-quarter fiscal 2024 results on Aug 1, before market open.
In the last reported quarter, the company’s earnings per share (EPS) of $3.17 surpassed the Zacks Consensus Estimate by 7.1%. Over the trailing four quarters, its earnings outperformed the Zacks Consensus Estimate on three occasions and matched once, delivering an earnings surprise of 5.4%, on average.
Let’s check out the factors that have shaped BDX’s performance prior to this announcement.
Factors to Note
BD Life Sciences
On first-quarter fiscal 2024earnings callin February, BD’s management confirmed witnessing solid growth in the Life Sciences segment. The segment’s fiscal second-quarter performance was driven by Integrated Diagnostic Solutions, with strength in microbiology platforms and specimen management.
In April, BD’s Biosciences business unit announced the global commercial release of the three- and four-laser additions to the BD FACSDiscover S8 Cell Sorter family, which complement the five-laser instrument launched last year. In February, BD announced a strategic partnership with Camtech Health to increase access to cervical cancer screening in Singapore through the country's first-ever program to offer at-home self-collection of samples for testing with the BD Onclarity HPV (human papillomavirus) assay. These products are likely to have witnessed robust adoption during the fiscal third quarter, thereby contributing to the segmental revenues.
In May, BD received the FDA’s approval for the use of self-collected vaginal specimens for HPV testing when cervical specimens cannot otherwise be obtained. This raises our optimism about the stock.
The Zacks Consensus Estimate for the BD Life Sciences segment’s revenues are currently pegged at $1.28 billion, up 4.3% year over year.
Becton, Dickinson and Company Price and EPS Surprise
Becton, Dickinson and Company price-eps-surprise | Becton, Dickinson and Company Quote
BD Interventional
During the fiscal second quarter, the segment was driven by strength in the Urology & Critical Care business unit, with continued momentum in the PureWick franchise, along with related licensing revenues. The Surgery unit had also delivered another strong quarter, supported by the global adoption of BD’s Phasix hernia resorbable scaffold. Peripheral Intervention unit was also robust, with growth in the peripheral vascular disease platform where BD continues to drive market penetration with its Rotarex Atherectomy System and venous portfolio.
We expect the robust adoption of BD’s products to have continued in the fiscal third quarter on the back of sustained demand, thereby significantly pushing up the segmental revenues.
The Zacks Consensus Estimate for the segment’s revenues is currently pegged at $1.26 billion, up 3.8% year over year.
Other Factors to Note
The BD Medical segment’s Medication Management Solutions business unit is expected to have continued to witness strong performance of infusion systems driven by the BD Alaris return to market. The segment is also likely to be driven by continued strong demand for its Pharmaceutical Systems’ Pre-fillable solutions for biologics.
In June, BD announced a definitive agreement to acquire Edwards Lifesciences’ Critical Care product group (Critical Care). The transaction, expected to close before the end of the calendar year 2024, is likely to expand BD's portfolio of smart connected care solutions with its growing set of leading monitoring technologies, advanced AI-enabled clinical decision tools and robust innovation pipeline that complement BD's existing technologies serving operating rooms and intensive care units.
However, the current unstable macroeconomic business environment, continued inflationary pressures, and labor dynamics are likely to have weighed on the company’s fiscal third-quarter revenues, raising our apprehension. Also, transitory market dynamics across the industry, including customer inventory destocking, are likely to have continued to weigh on BD’s fiscal third-quarter performance.
The Estimate Picture
For third-quarter fiscal 2023, the Zacks Consensus Estimate for revenues is pegged at $5.07 billion, implying an improvement of 3.9% from the prior-year quarter’s reported figure.
The consensus estimate for EPS is pegged at $3.31, indicating an increase of 11.8% from the prior-year period’s reported number.
What Our Model Suggests
Per our proven model, a stock with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold), along with a positive Earnings ESP, has higher chances of beating estimates. This is not the case here, as you can see below.
Earnings ESP: BD has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Zacks Rank: The company currently carries a Zacks Rank #2.
Stocks Worth a Look
Here are a few other medical stocks worth considering, as these also have the right combination of elements to beat on earnings this reporting cycle.
Penumbra, Inc. PEN has an Earnings ESP of +0.08% and a Zacks Rank of 2. PEN has an estimated long-term growth rate of 34.4%. You can see the complete list of today’s Zacks #1 Rank stocks here.
Penumbra’s earnings surpassed estimates in three of the trailing four quarters and missed once, with the average surprise being 25.9%.
United Therapeutics Corporation UTHR has an Earnings ESP of +2.27% and is a Zacks Rank #2 stock. UTHR has an estimated long-term growth rate of 9.2%.
United Therapeutics’ earnings surpassed estimates in all the trailing four quarters, with the average surprise being 12.4%.
The Cigna Group CI has an Earnings ESP of +1.59% and a Zacks Rank of 2. CI has an estimated long-term growth rate of 11.5%.
Cigna Group’s earnings surpassed estimates in all the trailing four quarters, with the average surprise being 3.3%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
Free Report – 3 Stocks Sneaking Into Hydrogen Energy
Demand for clean hydrogen energy is projected to reach $500 billion by 2030 and grow 5-FOLD by 2050. No guarantees, but three companies are quietly getting the jump on their competition.
Zacks Investment Research is temporarily offering an urgent Special Report naming and explaining these emerging powerhouses primed to boom. Click below for Hydrogen Energy: 3 Industrial Giants to Ride the Next Renewable Energy Wave.
See Stocks Now >>Becton, Dickinson and Company (BDX) : Free Stock Analysis Report
Cigna Group (CI) : Free Stock Analysis Report
United Therapeutics Corporation (UTHR) : Free Stock Analysis Report
Penumbra, Inc. (PEN) : Free Stock Analysis Report
To read this article on Zacks.com click here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
