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We reiterate our Neutral recommendation for Becton, Dickinson and Company (BDX - Analyst Report). The company reported fourth quarter fiscal 2012 adjusted earnings per share from continuing operations of $1.42, surpassing the Zacks Consensus Estimate by a couple of cents. Adjusted earnings per share from continuing operations of $5.37 in fiscal 2012 beat the corresponding Zacks Consensus Estimate by a penny.

In the reported quarter, income from continuing operations was $274.3 million ($1.35 per share), down 3.8% year over year. The company’s net income declined 3.6% year over year to $289 million ($1.43 per share) in the quarter.

Becton Dickinson reported fourth quarter revenues of $1,967 million, down 1.1% (up 4.7% in constant currency) year over year, edging past the Zacks Consensus Estimate of $1,965 million. Revenues in fiscal 2012 inched up 1.6% (up 4.3% in constant currency) year over year to $7,708 million, beating the Zacks Consensus Estimate of $7,707 million.

On a regional basis, domestic revenues increased 1.2% year over year to $824 million in the fourth quarter while overseas revenues decreased 2.6% (up 7.1% in constant currency) to $1,143 million. Overseas revenues were led by sustained growth in emerging nations and robust safety sales.

On a segment basis, for BD Medical, global revenues declined 0.5% (up 5.9% in constant currency) year over year to $1,049 million in the quarter, driven by healthy revenues from all operating units.

For BD Diagnostics, global revenues inched up 0.5% (up 5.1% in constant currency) year over year to $645 million, on account of robust growth in Preanalytical and Diagnostic Systems and contributions from Kiestra acquisition.

Global revenues from the BD Biosciences unit decreased 6.3% (down 0.7% in constant currency) year over year to $273.1 million. Sustained softness in the domestic research market was responsible for the year-over-year decline. This segment is solely comprised of Cell Analysis following the divestiture of Discovery Labware.   

We remain cautious about Becton Dickinson due to the lack of major short-term catalysts. The rising demand for safety-needle products (with higher price points and margins) was the primary driver of the company’s past growth. This is not expected to continue, given that the U.S. market is already largely penetrated.

On the positive side, Becton Dickinson’s preeminent global healthcare products franchise is partly insulated from volatile macroeconomic conditions and structural deficiencies elsewhere in the healthcare delivery field.

Becton Dickinson faces a wide range of competitors, including Baxter International (BAX - Analyst Report) in certain niches, in each of its three business segments. The stock currently retains a Zacks #3 Rank, which translates into a short-term Hold rating.

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