C.R. Bard Surpasses Zacks Estimate

C.R. Bard, Inc. (BCR) yesterday reported strong third quarter fiscal 2009 results after the market close. Earnings per share were $1.31, surpassing the Zacks Consensus Estimate of $1.27 and the year-ago earnings of $1.09.

Sales
Net sales in the quarter increased 3% year over year to $637.0 million. Excluding an unfavorable foreign currency translation (FX), net sales increased 6% year over year. On a geographic basis, U.S. sales contributed approximately 69.5% of total sales and increased 6% year over year. International sales declined 1% year over year.

Growth was witnessed across all major business segments. Vascular sales increased 8% year over year to $173.6 million. Growth was led by strong demand for the disposable electrophysiology (EP), biopsy, peripheral PTA catheters and stent products. This was partly offset by lower surgical graft product sales.

Urology sales increased 2% year over year to $177.5 million. Growth can be primarily attributed to strong sales of basic drainage and StatLock catheter stabilization products. However, this was partly mitigated by lower continence and IC Foley businesses.

Oncology sales increased 1% year over year to $171.6 million. Growth was led by higher sales of ports, PICC and Midline products. Surgical Specialties sales increased 3% year over year to $93.1 million.

Margins
Bard demonstrated strength in margins. Gross margin increased 90 basis points (bps) year over year to roughly 62.2%. Marketing, selling and administrative expenses as a percentage of sales declined 350 bps year over year to 25.8%. Research and development expenses as a percentage of sales increased 110 bps year over year to 6.8%.

Operating margin increased 290 bps year over year to 29.1%. Strong gross and operating margins propelled net margin higher by 230 bps year over year to 20.3%.

C.R. Bard designs, manufactures, packages, distributes, and sells medical, surgical, diagnostic, and patient care devices worldwide. The company faces a mix of competitors ranging from large manufacturers with multiple business lines like Boston Scientific Corporation (BSX) and Johnson & Johnson (JNJ) to smaller manufacturers that offer a limited selection of products like Angiodynamics, Inc. (ANGO).

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