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BD (BDX) Beats on Q4 Earnings and Revenues, FY22 View Issued
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Becton, Dickinson and Company (BDX - Free Report) , popularly known as BD, delivered adjusted earnings per share (EPS) of $2.59 in the fourth quarter of fiscal 2021, down 7.2% year over year. The figure, however, surpassed the Zacks Consensus Estimate by 6.6%.
The adjustments include expenses related to purchase accounting adjustments and integration costs, among others.
GAAP EPS for the quarter was 84 cents a share, reflecting a surge of 133.3% from the year-earlier figure.
Full-year adjusted EPS was $13.08, reflecting a 28.2% increase from the year-ago period. The metric surpassed the Zacks Consensus Estimate by 1.3%.
Revenues in Detail
BD registered revenues of $5.14 billion in the fiscal fourth quarter, up 7.3% year over year. The figure surpassed the Zacks Consensus Estimate by 4.7%. At constant exchange rate (CER), revenues improved 5.9%.
The top-line uptick was primarily driven by strength in base business, and robust segmental as well as geographic performances.
Full-year revenues were $20.25 billion, reflecting a 18.3% improvement from the year-ago period (up 15.6% at CER). The metric topped the Zacks Consensus Estimate by 1.1%.
Segment Details
BD’s operations consist of three worldwide business segments — BD Medical, BD Life Sciences and BD Interventional.
For the quarter under review, BD Medical reported worldwide revenues of $2.53 billion, up 9.2% from the year-ago quarter on a reported basis and 7.7% at CER. Per management, this upside can be attributed to growth in Medication Delivery Solutions, Medication Management Solutions, Pharmaceutical Systems and Diabetes Care units. However, this was partially offset by an expected decline in international infusion pump sales due to high demand in the prior-year period, especially in Europe.
Worldwide revenues in the BD Life Science segment totaled $1.53 billion, up 2.9% year over year on a reported basis and 1.5% at CER. The upside was driven by strong performance in the base business in the Integrated Diagnostic Solutions (“IDS”) and Biosciences units. Growth in the base business in IDS reflects continued recovery in demand for specimen management products and microbiology solutions. The Biosciences unit’s performance was driven by demand for research solutions as lab activity continued to normalize. However, COVID-19 diagnostic testing revenues in IDS fell to $316 million, down 30.1% from the prior-year number.
The BD Interventional segment generated worldwide revenues of $1.07 billion, up 9.5% from the year-ago quarter on a reported basis and 8.3% at CER. This was owing to the revenue uptick in the Surgery and Peripheral Intervention units, which reflects the recovery in deferrable procedure volumes year over year, despite pressures from the Delta variant. The Surgery unit witnessed growth across BD’s biosurgery, infection prevention and hernia platforms, whereas the Peripheral Intervention unit benefited from continued strong performance in atherectomy and oncology. Urology and Critical Care unit’s performance was driven by continued strong demand for acute urology products and the targeted temperature management portfolio.
Geographic Results
In the fiscal fourth quarter, revenues in the United States grew 1.9% to $2.80 billion.
International revenues grossed $2.33 billion, up 14.7% from the year-ago quarter on reported basis and 11.3% at CER.
Becton, Dickinson and Company Price, Consensus and EPS Surprise
In the quarter under review, BD’s gross profit rose 3.7% to $2.29 billion. However, gross margin contracted 157 basis points (bps) to 44.5%.
Selling and administrative expenses rose 11% to $1.33 billion. Research and development expenses went up 29.4% year over year to $387 million. Adjusted operating expenses of $1.72 billion increased 14.7% year over year.
Adjusted operating profit totaled $568 million, reflecting a 19.7% plunge from the prior-year quarter. Adjusted operating margin in the fiscal fourth quarter contracted 372 bps to 11.1%.
Financial Position
BD exited fiscal 2021 with cash and cash equivalents, and short-term investments of $2.29 billion compared with $2.85 billion at the end of fiscal 2020. Total debt (including short-term debt) at the end of fiscal 2021 was $17.61 billion compared with $17.93 billion at the end of fiscal 2020.
Cumulative net cash flow from operating activities at the end of fiscal 2021 was $4.65 billion compared with $3.54 billion a year ago.
During fiscal fourth quarter, BD repurchased approximately 3 million shares at a total cost of $750 million.
Meanwhile, BD has a consistent dividend-paying history with five-year annualized dividend growth being 3.02%.
Fiscal 2022 Guidance
BD continues to assume continued recovery from the pandemic as well as no major system-wide hospital restrictions on elective procedures related to the pandemic. On the back of these assumptions, the company has initiated its financial outlook for fiscal 2022.
BD projects its full fiscal year revenues to be in the range of $19.3 billion-$19.5 billion, reflecting base business revenue growth of 5-6% at CER. The Zacks Consensus Estimate for the revenues is pegged at $19.47 billion.
For the full fiscal, adjusted EPS is anticipated to be $12.30-$12.50. The Zacks Consensus Estimate for the same is pegged at $12.33.
Our Take
BD exited the fourth quarter of fiscal 2021 with better-than-expected results. The company’s robust segmental performances, along with solid geographical revenues, are impressive. The launches of BD’s FACSymphony A1 Cell Analyzer and COR System are encouraging. The FDA’s Emergency Use Authorization for BD Veritor At-Home COVID-19 Test and the 510(k) clearance received for expanded indications for Rotarex Rotational Excisional Atherectomy System raise our optimism. BD’s slew of collaborations also augurs well.
However, expected decline in international infusion pump sales and lower COVID-19 diagnostic testing revenues are discouraging. Contraction of both margins does not bode well as well.
Zacks Rank and Key Picks
BD currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader medical space that have announced quarterly results are West Pharmaceutical Services, Inc. (WST - Free Report) , Thermo Fisher Scientific Inc. (TMO - Free Report) and Chemed Corporation (CHE - Free Report) .
West Pharmaceutical, carrying a Zacks Rank #2 (Buy), reported third-quarter 2021 adjusted EPS of $2.06, which beat the Zacks Consensus Estimate by 13.2%. Third-quarter revenues of $706.5 million outpaced the consensus mark by 3.2%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Thermo Fisher reported third-quarter 2021 adjusted EPS of $5.76, which surpassed the Zacks Consensus Estimate by 23.3%. Third-quarter revenues of $9.33 billion outpaced the Zacks Consensus Estimate by 12%. It currently flaunts a Zacks Rank #1.
Chemed reported third-quarter 2021 adjusted EPS of $5.06, which surpassed the Zacks Consensus Estimate by 13.5%. Third-quarter revenues of $538.7 million outpaced the Zacks Consensus Estimate by 1.3%. It currently has a Zacks Rank #2.
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BD (BDX) Beats on Q4 Earnings and Revenues, FY22 View Issued
Becton, Dickinson and Company (BDX - Free Report) , popularly known as BD, delivered adjusted earnings per share (EPS) of $2.59 in the fourth quarter of fiscal 2021, down 7.2% year over year. The figure, however, surpassed the Zacks Consensus Estimate by 6.6%.
The adjustments include expenses related to purchase accounting adjustments and integration costs, among others.
GAAP EPS for the quarter was 84 cents a share, reflecting a surge of 133.3% from the year-earlier figure.
Full-year adjusted EPS was $13.08, reflecting a 28.2% increase from the year-ago period. The metric surpassed the Zacks Consensus Estimate by 1.3%.
Revenues in Detail
BD registered revenues of $5.14 billion in the fiscal fourth quarter, up 7.3% year over year. The figure surpassed the Zacks Consensus Estimate by 4.7%.
At constant exchange rate (CER), revenues improved 5.9%.
The top-line uptick was primarily driven by strength in base business, and robust segmental as well as geographic performances.
Full-year revenues were $20.25 billion, reflecting a 18.3% improvement from the year-ago period (up 15.6% at CER). The metric topped the Zacks Consensus Estimate by 1.1%.
Segment Details
BD’s operations consist of three worldwide business segments — BD Medical, BD Life Sciences and BD Interventional.
For the quarter under review, BD Medical reported worldwide revenues of $2.53 billion, up 9.2% from the year-ago quarter on a reported basis and 7.7% at CER. Per management, this upside can be attributed to growth in Medication Delivery Solutions, Medication Management Solutions, Pharmaceutical Systems and Diabetes Care units. However, this was partially offset by an expected decline in international infusion pump sales due to high demand in the prior-year period, especially in Europe.
Worldwide revenues in the BD Life Science segment totaled $1.53 billion, up 2.9% year over year on a reported basis and 1.5% at CER. The upside was driven by strong performance in the base business in the Integrated Diagnostic Solutions (“IDS”) and Biosciences units. Growth in the base business in IDS reflects continued recovery in demand for specimen management products and microbiology solutions. The Biosciences unit’s performance was driven by demand for research solutions as lab activity continued to normalize. However, COVID-19 diagnostic testing revenues in IDS fell to $316 million, down 30.1% from the prior-year number.
The BD Interventional segment generated worldwide revenues of $1.07 billion, up 9.5% from the year-ago quarter on a reported basis and 8.3% at CER. This was owing to the revenue uptick in the Surgery and Peripheral Intervention units, which reflects the recovery in deferrable procedure volumes year over year, despite pressures from the Delta variant. The Surgery unit witnessed growth across BD’s biosurgery, infection prevention and hernia platforms, whereas the Peripheral Intervention unit benefited from continued strong performance in atherectomy and oncology. Urology and Critical Care unit’s performance was driven by continued strong demand for acute urology products and the targeted temperature management portfolio.
Geographic Results
In the fiscal fourth quarter, revenues in the United States grew 1.9% to $2.80 billion.
International revenues grossed $2.33 billion, up 14.7% from the year-ago quarter on reported basis and 11.3% at CER.
Becton, Dickinson and Company Price, Consensus and EPS Surprise
Becton, Dickinson and Company price-consensus-eps-surprise-chart | Becton, Dickinson and Company Quote
Margin Analysis
In the quarter under review, BD’s gross profit rose 3.7% to $2.29 billion. However, gross margin contracted 157 basis points (bps) to 44.5%.
Selling and administrative expenses rose 11% to $1.33 billion. Research and development expenses went up 29.4% year over year to $387 million. Adjusted operating expenses of $1.72 billion increased 14.7% year over year.
Adjusted operating profit totaled $568 million, reflecting a 19.7% plunge from the prior-year quarter. Adjusted operating margin in the fiscal fourth quarter contracted 372 bps to 11.1%.
Financial Position
BD exited fiscal 2021 with cash and cash equivalents, and short-term investments of $2.29 billion compared with $2.85 billion at the end of fiscal 2020. Total debt (including short-term debt) at the end of fiscal 2021 was $17.61 billion compared with $17.93 billion at the end of fiscal 2020.
Cumulative net cash flow from operating activities at the end of fiscal 2021 was $4.65 billion compared with $3.54 billion a year ago.
During fiscal fourth quarter, BD repurchased approximately 3 million shares at a total cost of $750 million.
Meanwhile, BD has a consistent dividend-paying history with five-year annualized dividend growth being 3.02%.
Fiscal 2022 Guidance
BD continues to assume continued recovery from the pandemic as well as no major system-wide hospital restrictions on elective procedures related to the pandemic. On the back of these assumptions, the company has initiated its financial outlook for fiscal 2022.
BD projects its full fiscal year revenues to be in the range of $19.3 billion-$19.5 billion, reflecting base business revenue growth of 5-6% at CER. The Zacks Consensus Estimate for the revenues is pegged at $19.47 billion.
For the full fiscal, adjusted EPS is anticipated to be $12.30-$12.50. The Zacks Consensus Estimate for the same is pegged at $12.33.
Our Take
BD exited the fourth quarter of fiscal 2021 with better-than-expected results. The company’s robust segmental performances, along with solid geographical revenues, are impressive. The launches of BD’s FACSymphony A1 Cell Analyzer and COR System are encouraging. The FDA’s Emergency Use Authorization for BD Veritor At-Home COVID-19 Test and the 510(k) clearance received for expanded indications for Rotarex Rotational Excisional Atherectomy System raise our optimism. BD’s slew of collaborations also augurs well.
However, expected decline in international infusion pump sales and lower COVID-19 diagnostic testing revenues are discouraging. Contraction of both margins does not bode well as well.
Zacks Rank and Key Picks
BD currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader medical space that have announced quarterly results are West Pharmaceutical Services, Inc. (WST - Free Report) , Thermo Fisher Scientific Inc. (TMO - Free Report) and Chemed Corporation (CHE - Free Report) .
West Pharmaceutical, carrying a Zacks Rank #2 (Buy), reported third-quarter 2021 adjusted EPS of $2.06, which beat the Zacks Consensus Estimate by 13.2%. Third-quarter revenues of $706.5 million outpaced the consensus mark by 3.2%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Thermo Fisher reported third-quarter 2021 adjusted EPS of $5.76, which surpassed the Zacks Consensus Estimate by 23.3%. Third-quarter revenues of $9.33 billion outpaced the Zacks Consensus Estimate by 12%. It currently flaunts a Zacks Rank #1.
Chemed reported third-quarter 2021 adjusted EPS of $5.06, which surpassed the Zacks Consensus Estimate by 13.5%. Third-quarter revenues of $538.7 million outpaced the Zacks Consensus Estimate by 1.3%. It currently has a Zacks Rank #2.