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BD (BDX) Beats on Q2 Earnings and Revenues, Revises FY22 View
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Becton, Dickinson and Company (BDX - Free Report) , popularly known as BD, delivered adjusted earnings per share (“EPS”) of $3.18 in the second quarter of fiscal 2022, down 0.3% year over year. The figure, however, surpassed the Zacks Consensus Estimate by 6.7%.
The adjustments include expenses related to purchase accounting adjustments and integration costs, among others.
GAAP EPS for the quarter was $1.50, reflecting a surge of 59.6% from the year-earlier figure.
Revenues in Detail
BD registered revenues of $5.01 billion in the fiscal second quarter, up 2.1% year over year. The figure surpassed the Zacks Consensus Estimate by 3.1%.
At constant exchange rate (“CER”), revenues climbed 3.9%.
The top-line improvement primarily resulted from strength in base revenue growth. However, the overall top-line improvement was partially offset by a fall in worldwide COVID-only testing revenues, which amounted to $214 million (down 54.9% from the prior-year quarter).
Base revenues were $4.79 billion in the fiscal second quarter, up 8.2% year over year on a reported basis and 10.2% at CER.
Base organic revenue growth for the fiscal second quarter was 7.6% on a reported basis and 9.6% 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 $2.42 billion, up 4.5% from the year-ago quarter on a reported basis and 6.4% at CER. Per management, this upside can be attributed to growth in Medication Delivery Solutions, Medication Management Solutions and Pharmaceutical Systems units.
Worldwide revenues in the BD Life Sciences segment totaled $1.49 billion, down 6.4% year over year on a reported basis and 4.2% at CER. The decline resulted primarily from the Integrated Diagnostic Solutions (“IDS”) unit’s fall in COVID-only testing revenues. However, this was partially offset by the IDS unit’s base-business growth (driven by demand for combination flu/COVID-19 diagnostic tests and continued demand for specimen management products) and strength in the Biosciences unit.
BD Interventional segment generated worldwide revenues of $1.11 billion, up 9.9% from the year-ago quarter on a reported basis and 11.2% at CER. This was owing to strength across the segment and the benefit from the comparison to the prior-year negative pandemic-led impacts on deferrable procedures.
Geographic Results
In the fiscal second quarter, revenues in the United States improved 14% to $ 2.81 billion.
International revenues grossed $2.20 billion, down 9.9% from the year-ago quarter on a reported basis and 6.2% at CER.
Becton, Dickinson and Company Price, Consensus and EPS Surprise
In the quarter under review, BD’s gross profit climbed 2.6% to $2.31 billion. Gross margin expanded 23 basis points (bps) to 45.9%.
Selling and administrative expenses rose 7.3% to $1.23 billion. Research and development expenses went up 8.2% year over year to $343 million.
Adjusted operating expenses of $1.58 billion increased 7.5% year over year.
Adjusted operating profit totaled $730 million, reflecting a 6.5% plunge from the prior-year quarter. Adjusted operating margin in the fiscal second quarter contracted 135 bps to 14.6%.
Financial Position
BD exited the second quarter of fiscal 2022 with cash and cash equivalents, and short-term investments of $3.16 billion compared with $1.91 billion at the end of fiscal first quarter. Total debt (including short-term debt) at the end of the second quarter of fiscal 2022 was $18.64 billion compared with $17.42 billion at the end of fiscal first quarter.
Cumulative net cash flow from operating activities at the end of the second quarter of fiscal 2022 was $1.12 billion compared with $2.72 billion a year ago.
Meanwhile, BD has a consistent dividend-paying history, with its five-year annualized dividend growth being 3.55%.
Fiscal 2022 Guidance
BD has revised its financial outlook for fiscal 2022 on a pre-spin basis, which includes results of the Diabetes Care business as well.
BD now projects its full fiscal year revenues to be in the range of $19.6-$19.8 billion, up from the earlier projection of $19.55-$19.75 billion. The Zacks Consensus Estimate for revenues is pegged at $19.54 billion.
The revenue projections for fiscal 2022 now include base-business revenue growth of 6.75-7.75% at CER, up from the earlier projection of 5.75-6.75%. The outlook continues to estimate approximately $450 million in COVID-19-only diagnostic testing revenues.
For the full fiscal year, adjusted EPS is anticipated to be $12.85-$13.00, narrowed down from the previously expected range of $12.80-$13.00. The Zacks Consensus Estimate for the same is pegged at $12.75.
Our Take
BD exited the second quarter of fiscal 2022 with better-than-expected results. Improvement in the overall top line and base revenues are impressive. Robust performances by the majority of the segments and in the United States are impressive. BD’s completion of the Cytognos buyout to expand from cancer discovery and diagnosis into post-treatment monitoring looks promising. The company also launched a new family of BD reagents, BD Horizon RealYellow 586 Reagents, and also released the new BD Rhapsody TCR/BCR Multiomic Assay, which raise our optimism.
BD’s completion of the Embecta Corp. (embecta) spin of its former Diabetes Care business also augurs well. Gross margin expansion is a plus. A raised revenue outlook for the full fiscal year is also promising.
However, year-over-year decline in BD’s bottom line is disappointing. Fall in BD Life Sciences as well as international revenues is worrying. Lower COVID-only testing revenues are discouraging. Contraction of adjusted operating margin does not bode well as well.
Zacks Rank and Stocks to Consider
BD currently carries a Zacks Rank #4 (Sell).
Some better-ranked stocks in the broader medical space that have announced quarterly results are Omnicell, Inc. (OMCL - Free Report) , UnitedHealth Group Incorporated (UNH - Free Report) and Alkermes plc (ALKS - Free Report) .
Omnicell, carrying a Zacks Rank #2 (Buy), reported first-quarter 2022 adjusted EPS of 83 cents, which beat the Zacks Consensus Estimate by 16.9%. Revenues of $318.8 million outpaced the consensus mark by 0.7%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Omnicell has an estimated long-term growth rate of 16%. OMCL’s earnings surpassed estimates in three of the trailing four quarters, the average surprise being 13.4%.
UnitedHealth, having a Zacks Rank #2, reported first-quarter 2022 adjusted EPS of $5.49, which beat the Zacks Consensus Estimate by 1.7%. Revenues of $80.1 billion outpaced the consensus mark by 1.9%.
UnitedHealth has an estimated long-term growth rate of 14.8%. UNH’s earnings surpassed estimates in the trailing four quarters, the average surprise being 3.7%.
Alkermes reported first-quarter 2022 adjusted EPS of 12 cents, which surpassed the Zacks Consensus Estimate of a penny. Revenues of $278.6 million outpaced the Zacks Consensus Estimate by 6.2%. It currently sports a Zacks Rank #1.
Alkermes has an estimated long-term growth rate of 25.1%. ALKS’ earnings surpassed estimates in the trailing four quarters, the average surprise being 350.5%.
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BD (BDX) Beats on Q2 Earnings and Revenues, Revises FY22 View
Becton, Dickinson and Company (BDX - Free Report) , popularly known as BD, delivered adjusted earnings per share (“EPS”) of $3.18 in the second quarter of fiscal 2022, down 0.3% year over year. The figure, however, surpassed the Zacks Consensus Estimate by 6.7%.
The adjustments include expenses related to purchase accounting adjustments and integration costs, among others.
GAAP EPS for the quarter was $1.50, reflecting a surge of 59.6% from the year-earlier figure.
Revenues in Detail
BD registered revenues of $5.01 billion in the fiscal second quarter, up 2.1% year over year. The figure surpassed the Zacks Consensus Estimate by 3.1%.
At constant exchange rate (“CER”), revenues climbed 3.9%.
The top-line improvement primarily resulted from strength in base revenue growth. However, the overall top-line improvement was partially offset by a fall in worldwide COVID-only testing revenues, which amounted to $214 million (down 54.9% from the prior-year quarter).
Base revenues were $4.79 billion in the fiscal second quarter, up 8.2% year over year on a reported basis and 10.2% at CER.
Base organic revenue growth for the fiscal second quarter was 7.6% on a reported basis and 9.6% 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 $2.42 billion, up 4.5% from the year-ago quarter on a reported basis and 6.4% at CER. Per management, this upside can be attributed to growth in Medication Delivery Solutions, Medication Management Solutions and Pharmaceutical Systems units.
Worldwide revenues in the BD Life Sciences segment totaled $1.49 billion, down 6.4% year over year on a reported basis and 4.2% at CER. The decline resulted primarily from the Integrated Diagnostic Solutions (“IDS”) unit’s fall in COVID-only testing revenues. However, this was partially offset by the IDS unit’s base-business growth (driven by demand for combination flu/COVID-19 diagnostic tests and continued demand for specimen management products) and strength in the Biosciences unit.
BD Interventional segment generated worldwide revenues of $1.11 billion, up 9.9% from the year-ago quarter on a reported basis and 11.2% at CER. This was owing to strength across the segment and the benefit from the comparison to the prior-year negative pandemic-led impacts on deferrable procedures.
Geographic Results
In the fiscal second quarter, revenues in the United States improved 14% to $ 2.81 billion.
International revenues grossed $2.20 billion, down 9.9% from the year-ago quarter on a reported basis and 6.2% 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 climbed 2.6% to $2.31 billion. Gross margin expanded 23 basis points (bps) to 45.9%.
Selling and administrative expenses rose 7.3% to $1.23 billion. Research and development expenses went up 8.2% year over year to $343 million.
Adjusted operating expenses of $1.58 billion increased 7.5% year over year.
Adjusted operating profit totaled $730 million, reflecting a 6.5% plunge from the prior-year quarter. Adjusted operating margin in the fiscal second quarter contracted 135 bps to 14.6%.
Financial Position
BD exited the second quarter of fiscal 2022 with cash and cash equivalents, and short-term investments of $3.16 billion compared with $1.91 billion at the end of fiscal first quarter. Total debt (including short-term debt) at the end of the second quarter of fiscal 2022 was $18.64 billion compared with $17.42 billion at the end of fiscal first quarter.
Cumulative net cash flow from operating activities at the end of the second quarter of fiscal 2022 was $1.12 billion compared with $2.72 billion a year ago.
Meanwhile, BD has a consistent dividend-paying history, with its five-year annualized dividend growth being 3.55%.
Fiscal 2022 Guidance
BD has revised its financial outlook for fiscal 2022 on a pre-spin basis, which includes results of the Diabetes Care business as well.
BD now projects its full fiscal year revenues to be in the range of $19.6-$19.8 billion, up from the earlier projection of $19.55-$19.75 billion. The Zacks Consensus Estimate for revenues is pegged at $19.54 billion.
The revenue projections for fiscal 2022 now include base-business revenue growth of 6.75-7.75% at CER, up from the earlier projection of 5.75-6.75%. The outlook continues to estimate approximately $450 million in COVID-19-only diagnostic testing revenues.
For the full fiscal year, adjusted EPS is anticipated to be $12.85-$13.00, narrowed down from the previously expected range of $12.80-$13.00. The Zacks Consensus Estimate for the same is pegged at $12.75.
Our Take
BD exited the second quarter of fiscal 2022 with better-than-expected results. Improvement in the overall top line and base revenues are impressive. Robust performances by the majority of the segments and in the United States are impressive. BD’s completion of the Cytognos buyout to expand from cancer discovery and diagnosis into post-treatment monitoring looks promising. The company also launched a new family of BD reagents, BD Horizon RealYellow 586 Reagents, and also released the new BD Rhapsody TCR/BCR Multiomic Assay, which raise our optimism.
BD’s completion of the Embecta Corp. (embecta) spin of its former Diabetes Care business also augurs well. Gross margin expansion is a plus. A raised revenue outlook for the full fiscal year is also promising.
However, year-over-year decline in BD’s bottom line is disappointing. Fall in BD Life Sciences as well as international revenues is worrying. Lower COVID-only testing revenues are discouraging. Contraction of adjusted operating margin does not bode well as well.
Zacks Rank and Stocks to Consider
BD currently carries a Zacks Rank #4 (Sell).
Some better-ranked stocks in the broader medical space that have announced quarterly results are Omnicell, Inc. (OMCL - Free Report) , UnitedHealth Group Incorporated (UNH - Free Report) and Alkermes plc (ALKS - Free Report) .
Omnicell, carrying a Zacks Rank #2 (Buy), reported first-quarter 2022 adjusted EPS of 83 cents, which beat the Zacks Consensus Estimate by 16.9%. Revenues of $318.8 million outpaced the consensus mark by 0.7%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Omnicell has an estimated long-term growth rate of 16%. OMCL’s earnings surpassed estimates in three of the trailing four quarters, the average surprise being 13.4%.
UnitedHealth, having a Zacks Rank #2, reported first-quarter 2022 adjusted EPS of $5.49, which beat the Zacks Consensus Estimate by 1.7%. Revenues of $80.1 billion outpaced the consensus mark by 1.9%.
UnitedHealth has an estimated long-term growth rate of 14.8%. UNH’s earnings surpassed estimates in the trailing four quarters, the average surprise being 3.7%.
Alkermes reported first-quarter 2022 adjusted EPS of 12 cents, which surpassed the Zacks Consensus Estimate of a penny. Revenues of $278.6 million outpaced the Zacks Consensus Estimate by 6.2%. It currently sports a Zacks Rank #1.
Alkermes has an estimated long-term growth rate of 25.1%. ALKS’ earnings surpassed estimates in the trailing four quarters, the average surprise being 350.5%.