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Becton Dickinson (BDX) Earnings Surpass Estimates in Q4

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Becton, Dickinson and Company (BDX - Free Report) , also known as BD, reported fourth-quarter fiscal 2020 adjusted earnings per share (EPS) of $2.79, which beat the Zacks Consensus Estimate of $2.50 by 11.6%. The bottom line however dropped 15.7% on a year-over-year basis and fell 15.1% at constant currency (cc).

For fiscal 2020, adjusted EPS came in at $10.20, which beat the Zacks Consensus Estimate by 3%. However, the figure fell 12.7% year over year.

Revenues

For the quarter, the company raked in revenues of $4.78 billion, beating the Zacks Consensus Estimate by 6.7%. Also, the figure grew 4.4% from the year-ago quarter on a reported and currency-neutral basis.

For fiscal 2020, revenues totaled $17.11 billion, beating the Zacks Consensus Estimate by 1.7%. However, the figure fell 1% year over year.

Segment Details

BD Medical

In the quarter under review, the company reported worldwide revenues of $2.32 billion, down 4.9% from the year-ago quarter, both on a reported basis and at cc. Per management, the downside can be attributed to BD Alaris System remediation in the Medication Management Solutions unit and the impact of COVID-19 across the segment. However, sustained robust performance in the Pharmaceutical Systems unit partially offset the downside.

BD Life Science

Worldwide revenues in the segment totaled $1.49 billion, up 31.2% year over year and 31.4% at cc. Per management, the upside was driven by strong sales associated with  COVID-19 diagnostic testing solutions in the Diagnostic Systems unit on the BD Veritor and BD Max platforms.

BD Interventional

This segment generated worldwide revenues of $0.98 billion, down 3.4% from the year-ago quarter and 3.5% at cc. This was due to the impact of COVID-19 on the segment.

Geographic Results

In the fiscal third quarter, revenues in the United States grew 7.4% to $2.75 billion. Per management, solid performance in the United States reflects higher sales associated with COVID-19 testing solutions in the Diagnostic Systems unit on the BD Veritor and BD Max platforms. However, expected decline in the Medication Management Solutions unit due to the BD Alaris System remediation partially offset the upside.

International

Revenues outside the United States grossed $2.03 billion, up 0.5% from the year-ago quarter, both on reported and currency-neutral basis. Per management, this upside was driven by strong performance in Europe, which was partially offset by declines in China, EMA and Latin America.

Margin Analysis

In the fiscal fourth quarter, gross profit amounted to $2.2 billion, down 2.6% from the prior-year quarter tally. Gross margin was 46.1%, down 332 bps from the prior-year quarter.

Adjusted operating profit amounted to $707 million, down 21.6% from the year-ago figure. Adjusted operating margin was 14.8%, down 490 bps.

Becton, Dickinson and Company Price, Consensus and EPS Surprise

 

Becton, Dickinson and Company Price, Consensus and EPS Surprise

Becton, Dickinson and Company price-consensus-eps-surprise-chart | Becton, Dickinson and Company Quote

Cash Position

The company exited fiscal 2020 with cash and equivalents amounting to $2.83 billion, compared with $536 million in the year-ago period. Cumulative net cash provided by operating activities came in at $3.54 billion, compared with  $3.33 billion in the year-ago period.

Fiscal 2021 Guidance

For 2021, revenues are projected to grow high single to low double-digits percentage rate. The Zacks Consensus Estimate for the same is pegged at $18.80 billion.

Full fiscal 2021, adjusted EPS is estimated between $12.40 and $12.60. This suggests growth of almost 21.5% to 23.5%  compared to the prior fiscal year. The Zacks Consensus Estimate for the same is pegged at $12.53.

Wrapping Up

BD exited fiscal 2020 on a strong note. Within the United States, the Diagnostic Systems unit witnessed strong revenue growth due to COVID-19 testing. The company continues to see solid demand for its product portfolio that supports the global COVID-19 response, especially the recent launch of its COVID-19 rapid point-of-care antigen test. The company saw revenue growth in the BD Life Science segment. Both domestic and international revenues increased year over year in the quarter under review. A plethora of recent regulatory approvals instill optimism.

However, decline across the other two core segments during the quarter is concerning. Contraction in gross and adjusted operating margins raises concern. Unfavorable foreign currency impacted BD’s quarterly bottom line.

Zacks Rank and Key Picks

BD currently carries a Zacks Rank #4 (Sell).

Some better-ranked stocks in the broader medical space that have announced their quarterly results are Thermo Fisher Scientific Inc. (TMO - Free Report) , Align Technology, Inc. (ALGN - Free Report) and AngioDynamics, Inc. (ANGO - Free Report) . While Align Technology currently sports a Zacks Rank #1 (Strong Buy), the other two carry a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks #1 Rank  stocks here.

Thermo Fisher reported third-quarter 2020 adjusted EPS of $5.63, beating the Zacks Consensus Estimate by 28.8%. Revenues of $8.52 billion surpassed the consensus mark by 10%.

Align Technology reported third-quarter 2020 adjusted EPS of $2.25, which surpassed the Zacks Consensus Estimate by 281.4%. Revenues of $734.1 million outpaced the consensus mark by 38%.

AngioDynamics reported first-quarter fiscal 2021 adjusted EPS of 2 cents against the Zacks Consensus Estimate of a loss per share of 6 cents. Revenues of $70.2 million beat the consensus mark by 6.9%.

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