Back to top

Image: Bigstock

BD (BDX) Beats on Q1 Earnings and Revenues, Raises FY22 View

Read MoreHide Full Article

Becton, Dickinson and Company (BDX - Free Report) , popularly known as BD, delivered adjusted earnings per share (EPS) of $3.64 in the first quarter of fiscal 2022, down 20% year over year. The figure, however, surpassed the Zacks Consensus Estimate by 27.3%.

The adjustments include expenses related to purchase accounting adjustments and integration costs, among others.

GAAP EPS for the quarter was $2.28, reflecting a decline of 31.9% from the year-earlier figure.

Revenues in Detail

BD registered revenues of $4.99 billion in the fiscal first quarter, down 6% year over year. The figure surpassed the Zacks Consensus Estimate by 4.7%.

At constant exchange rate (“CER”), revenues fell 5.9%.

The top line decline primarily resulted from a fall in worldwide COVID-only testing revenues.

Base revenues were $4.81 billion in the fiscal first quarter, up 8.1% year over year on a reported basis and 8.3% at CER.

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 $2.39 billion, up 6% from the year-ago quarter both on a reported basis and at CER. Per management, this upside can be attributed to growth in Medication Delivery Solutions, Pharmaceutical Systems and Diabetes Care units. However, this was partially offset by an expected decline in the infusion business due to high demand for infusion pumps in the prior year in the United States and Europe.

Worldwide revenues in the BD Life Science segment totaled $1.48 billion, down 25% year over year on a reported basis and down 24.8% at CER. The decline resulted primarily from a fall in COVID-only testing revenues, which were lower by 78.6% from the prior-year period. However, this was partially offset by the segment’s base business improvement of 16.7% on a reported basis and 17.2% at CER.

BD Interventional segment generated worldwide revenues of $1.12 billion, up 3.7% from the year-ago quarter on a reported basis and 3.8% at CER. This was owing to strength in the Surgery and Urology & Critical Care business units. However, this was partially offset by disruptions in the Peripheral Intervention business unit (which, in turn, partially benefited from the recent acquisition of Venclose and continued strong performance in atherectomy, particularly in China).

Geographic Results

In the fiscal first quarter, revenues in the United States fell 8.9% to $2.85 billion.

International revenues grossed $2.14 billion, down 2% from the year-ago quarter on a reported basis and 1.7% at CER.

Margin Analysis

In the quarter under review, BD’s gross profit fell 11.3% to $2.42 billion. Gross margin contracted 289 basis points (bps) to 48.5%.

Selling and administrative expenses rose 6.4% to $1.22 billion. Research and development expenses went up 13.1% year over year to $329 million. Adjusted operating expenses of $1.55 billion increased 7.8% year over year.

Adjusted operating profit totaled $871 million, reflecting a 32.6% plunge from the prior-year quarter. Adjusted operating margin in the fiscal first quarter contracted 687 bps to 17.4%.

Financial Position

BD exited the first quarter of fiscal 2022 with cash and cash equivalents, and short-term investments of $1.91 billion compared with $2.29 billion at the end of fiscal 2021. Total debt (including short-term debt) at the end of the first quarter of fiscal 2022 was $17.42 billion compared with $17.61 billion at the end of fiscal 2021.

Net cash flow from operating activities at the end of the first quarter of fiscal 2022 was $674 million compared with $1.53 billion a year ago.

Meanwhile, BD has a consistent dividend-paying history, with five-year annualized dividend growth being 3.34%.

Fiscal 2022 Guidance

BD has raised its financial outlook for fiscal 2022.

BD projects its full fiscal year revenues to be in the range of $19.55 billion-$19.75 billion, up from the earlier projection of $19.3 billion-$19.5 billion. The Zacks Consensus Estimate for the revenues is pegged at $19.44 billion.

The revenue projections for fiscal 2022 include base business revenue growth of 5.75-6.75% at CER, up from the earlier projection of 5-6% and approximately $450 million in COVID-19-only diagnostic testing revenues, up from $200 million announced previously.

For the full fiscal year, adjusted EPS is anticipated to be $12.80-$13.00, up from the previously expected range of 12.30-$12.50. The Zacks Consensus Estimate for the same is pegged at $12.43.

Our Take

BD exited the first quarter of fiscal 2022 with better-than-expected results. Improvement in base revenues and robust performances by majority of the segments are impressive. Receipt of the FDA’s 510(k) clearance for BD Kiestra IdentifA and CE Mark for BD COR MX raise our optimism. BD’s slew of collaborations and buyouts also augur well. A raised financial outlook for the full fiscal year is also promising.

However, year-over-year decline in both top and bottom lines are disappointing. Fall in BD Life Science segment as well as both geographical regions are worrying. Expected decline in the infusion business and lower COVID-only 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 that are supposed to report earnings soon are Cerner Corporation , Baxter International (BAX - Free Report) and AMN Healthcare Services, Inc. (AMN - Free Report) .

The Zacks Consensus Estimate for Cerner’s fourth-quarter 2021 adjusted EPS is currently pegged at 88 cents. The consensus estimate for fourth-quarter 2021 revenues is pegged at $1.49 billion. The company currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Cerner has an estimated long-term growth rate of 12.8%. CERN’s earnings yield of 4% compares favorably with the industry’s negative yield.

Baxter currently has a Zacks Rank #2. The Zacks Consensus Estimate for its fourth-quarter 2021 adjusted EPS is currently pegged at $1.03. The consensus estimate for fourth-quarter revenues is pinned at $3.35 billion.

Baxter has an estimated long-term growth rate of 9.5%. BAX’s earnings yield of 4.9% compares favorably with the industry’s negative yield.

AMN Healthcare currently carries a Zacks Rank #2. The Zacks Consensus Estimate for its fourth-quarter 2021 adjusted EPS is currently pegged at $2.58. The consensus estimate for its revenues stands at $1.28 billion.

AMN Healthcare has an estimated long-term growth rate of 16.2%. AMN’s earnings yield of 6.4% compares favorably with the industry’s 0.9%.


Free Zacks Research for the Tickers Above


Normally $25 each - click below to receive one report FREE:


Becton, Dickinson and Company (BDX) - free report >>

Baxter International Inc. (BAX) - free report >>

AMN Healthcare Services Inc (AMN) - free report >>