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In the last reported quarter, the company’s earnings per share (EPS) of $2.96 surpassed the Zacks Consensus Estimate by 2.4%. Over the trailing four quarters, its earnings outperformed the Zacks Consensus Estimate on all occasions, delivering an earnings surprise of 4.7%, on average.
Let’s check out the factors that have shaped BDX’s performance prior to this announcement.
Factors to Note
BD Life Sciences
On third-quarter fiscal 2023 earnings call in August, BD confirmed that it continued to witness lower COVID-only testing revenues, which led to a decline in its Life Sciences segment. Excluding COVID-only testing, the Life Sciences segment’s base revenues were also flat.
However, the segment’s base revenues grew on an underlying basis, with strong growth across its Biosciences (BDB) business unit. The segment’s Integrated Diagnostic Solutions (IDS) business unit continued to witness strong adoption of BD Kiestra IdentifA and Total Modular Track solutions and robust demand for blood culture and ID/AST reagents. IDS base business performance also reflected continued strong growth from Molecular In Vitro Diagnostic assays leveraging the BD COR System and the incremental BD Max System installed base.
BDB’s performance reflected strength in Cancer reagents leveraging BD’s growing installed base of FACSLyric analyzers, adoption of FACSDuet sample preparation automation, and continued strong growth in research reagents enabled by BD Horizon dyes.
These trends are likely to have continued in fourth-quarter fiscal 2023 as well. This, in turn, is anticipated to have contributed to the strength in base business despite the expected ceaseless fall in COVID-only testing revenues. This is likely to have significantly driven up the segmental revenues.
BD’s fiscal fourth-quarter segmental revenues are also likely to have benefited from the expected continued adoption of BD FACSDuet Premium Sample Preparation System (launched in June) and BD FACSDiscover S8 Cell Sorter (launched in May).
In August, BD received the FDA’s 510(k) clearance for the BD Respiratory Viral Panel for the BD MAX System. This raises our optimism about the stock.
However, the continued decline in COVID-only testing revenues is likely to have weighed on BD’s Life Sciences segment’s revenues in fourth-quarter fiscal 2023. On a positive note, management stating that strong base business results enabled BD to fully absorb an increased earnings headwind associated with the loss of COVID-only revenue raises optimism about the stock.
The Zacks Model estimates the BD Life Sciences revenues to be $1.34 billion in the fiscal fourth quarter, suggesting an improvement of 3.9% from the year-ago quarter’s reported figure.
Becton, Dickinson and Company Price and EPS Surprise
In June, BD signed a definitive agreement to sell its Surgical Instrumentation platform to STERIS. Per management, the value-creating transaction will likely support the achievement of BD 2025 financial goals and advance the segment’s focus on high-growth end markets. Management also believes that the divestiture will allow it to focus on BD Surgery’s strategic investments In Advanced Repair and Reconstruction and surgical complications, which are driving results and helping to address unmet needs in healthcare. The sale was completed by the time BD reported its third-quarter fiscal 2023 results in August. This raises our optimism about the company’s prospects.
During the fiscal third quarter, the segment continued to witness strong growth, driven by continued market adoption of BD’s products. These trends are likely to have continued in the fiscal fourth quarter as well, thereby significantly pushing up the segmental revenues.
The Zacks Model estimates the BD Interventional revenues to be $1.22 billion, suggesting an uptick of 10.8% from the year-ago quarter’s reported figure.
Other Factors to Note
In July, BD announced that the updated BD Alaris Infusion System received the FDA’s 510(k) clearance, which enables both remediation and a return to full commercial operations for the most comprehensive infusion system available in the United States. In May, BD announced expanded customer availability of an all-in-one prefilled flush syringe with an integrated disinfection unit, BD PosiFlush SafeScrub. These products are likely to have witnessed robust adoption in recent months, thereby driving up revenues in the to-be-reported quarter.
BD is likely to have witnessed continued momentum in its Medical segment. Continued strong growth in Pharmacy Automation (led by Parata and BD ROWA solutions) and strength in pre-fillable solutions (such as BD Hypak) and innovative products (like BD Neopak, BD Effivax and BD Hylok) are likely to have benefited the company in the to-be-reported quarter as well.
However, the current unstable macroeconomic business environment, resulting from moderating but elevated inflationary pressures and various supply-chain dynamics, is likely to have weighed on the company’s fiscal fourth-quarter revenues, raising our apprehension.
The Estimate Picture
For fourth-quarter fiscal 2023, the Zacks Consensus Estimate for revenues is pegged at $5.02 billion, implying an improvement of 5.4% from the prior-year quarter’s reported figure.
The consensus estimate for EPS is pegged at $3.42, indicating an increase of 24.4% from the prior-year period’s reported number.
What Our Model Suggests
Per our proven model, a stock with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold), along with a positive Earnings ESP, has higher chances of beating estimates. This is not the case here, as you can see below.
Earnings ESP: BD has an Earnings ESP of -2.98%. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Zacks Rank: The company currently carries a Zacks Rank #3.
Stocks Worth a Look
Here are a few other medical stocks worth considering, as these also have the right combination of elements to beat on earnings this reporting cycle.
Image: Bigstock
BD (BDX) Gears Up for Q4 Earnings: What's in the Offing?
Becton Dickinson and Company (BDX - Free Report) , popularly known as BD, is scheduled to report fourth-quarter fiscal 2023 results on Nov 9, before market open.
In the last reported quarter, the company’s earnings per share (EPS) of $2.96 surpassed the Zacks Consensus Estimate by 2.4%. Over the trailing four quarters, its earnings outperformed the Zacks Consensus Estimate on all occasions, delivering an earnings surprise of 4.7%, on average.
Let’s check out the factors that have shaped BDX’s performance prior to this announcement.
Factors to Note
BD Life Sciences
On third-quarter fiscal 2023 earnings call in August, BD confirmed that it continued to witness lower COVID-only testing revenues, which led to a decline in its Life Sciences segment. Excluding COVID-only testing, the Life Sciences segment’s base revenues were also flat.
However, the segment’s base revenues grew on an underlying basis, with strong growth across its Biosciences (BDB) business unit. The segment’s Integrated Diagnostic Solutions (IDS) business unit continued to witness strong adoption of BD Kiestra IdentifA and Total Modular Track solutions and robust demand for blood culture and ID/AST reagents. IDS base business performance also reflected continued strong growth from Molecular In Vitro Diagnostic assays leveraging the BD COR System and the incremental BD Max System installed base.
BDB’s performance reflected strength in Cancer reagents leveraging BD’s growing installed base of FACSLyric analyzers, adoption of FACSDuet sample preparation automation, and continued strong growth in research reagents enabled by BD Horizon dyes.
These trends are likely to have continued in fourth-quarter fiscal 2023 as well. This, in turn, is anticipated to have contributed to the strength in base business despite the expected ceaseless fall in COVID-only testing revenues. This is likely to have significantly driven up the segmental revenues.
BD’s fiscal fourth-quarter segmental revenues are also likely to have benefited from the expected continued adoption of BD FACSDuet Premium Sample Preparation System (launched in June) and BD FACSDiscover S8 Cell Sorter (launched in May).
In August, BD received the FDA’s 510(k) clearance for the BD Respiratory Viral Panel for the BD MAX System. This raises our optimism about the stock.
However, the continued decline in COVID-only testing revenues is likely to have weighed on BD’s Life Sciences segment’s revenues in fourth-quarter fiscal 2023. On a positive note, management stating that strong base business results enabled BD to fully absorb an increased earnings headwind associated with the loss of COVID-only revenue raises optimism about the stock.
The Zacks Model estimates the BD Life Sciences revenues to be $1.34 billion in the fiscal fourth quarter, suggesting an improvement of 3.9% from the year-ago quarter’s reported figure.
Becton, Dickinson and Company Price and EPS Surprise
Becton, Dickinson and Company price-eps-surprise | Becton, Dickinson and Company Quote
BD Interventional
In June, BD signed a definitive agreement to sell its Surgical Instrumentation platform to STERIS. Per management, the value-creating transaction will likely support the achievement of BD 2025 financial goals and advance the segment’s focus on high-growth end markets. Management also believes that the divestiture will allow it to focus on BD Surgery’s strategic investments In Advanced Repair and Reconstruction and surgical complications, which are driving results and helping to address unmet needs in healthcare. The sale was completed by the time BD reported its third-quarter fiscal 2023 results in August. This raises our optimism about the company’s prospects.
During the fiscal third quarter, the segment continued to witness strong growth, driven by continued market adoption of BD’s products. These trends are likely to have continued in the fiscal fourth quarter as well, thereby significantly pushing up the segmental revenues.
The Zacks Model estimates the BD Interventional revenues to be $1.22 billion, suggesting an uptick of 10.8% from the year-ago quarter’s reported figure.
Other Factors to Note
In July, BD announced that the updated BD Alaris Infusion System received the FDA’s 510(k) clearance, which enables both remediation and a return to full commercial operations for the most comprehensive infusion system available in the United States. In May, BD announced expanded customer availability of an all-in-one prefilled flush syringe with an integrated disinfection unit, BD PosiFlush SafeScrub. These products are likely to have witnessed robust adoption in recent months, thereby driving up revenues in the to-be-reported quarter.
BD is likely to have witnessed continued momentum in its Medical segment. Continued strong growth in Pharmacy Automation (led by Parata and BD ROWA solutions) and strength in pre-fillable solutions (such as BD Hypak) and innovative products (like BD Neopak, BD Effivax and BD Hylok) are likely to have benefited the company in the to-be-reported quarter as well.
However, the current unstable macroeconomic business environment, resulting from moderating but elevated inflationary pressures and various supply-chain dynamics, is likely to have weighed on the company’s fiscal fourth-quarter revenues, raising our apprehension.
The Estimate Picture
For fourth-quarter fiscal 2023, the Zacks Consensus Estimate for revenues is pegged at $5.02 billion, implying an improvement of 5.4% from the prior-year quarter’s reported figure.
The consensus estimate for EPS is pegged at $3.42, indicating an increase of 24.4% from the prior-year period’s reported number.
What Our Model Suggests
Per our proven model, a stock with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold), along with a positive Earnings ESP, has higher chances of beating estimates. This is not the case here, as you can see below.
Earnings ESP: BD has an Earnings ESP of -2.98%. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Zacks Rank: The company currently carries a Zacks Rank #3.
Stocks Worth a Look
Here are a few other medical stocks worth considering, as these also have the right combination of elements to beat on earnings this reporting cycle.
HealthEquity, Inc. (HQY - Free Report) has an Earnings ESP of +9.57% and a Zacks Rank of 1. HQY has an estimated long-term growth rate of 26.7%. You can see the complete list of today’s Zacks #1 Rank stocks here.
HealthEquity’s earnings surpassed estimates in all the trailing four quarters, with the average surprise being 13%.
Outset Medical, Inc. (OM - Free Report) has an Earnings ESP of +2.36% and is a Zacks #2 Rank stock. OM has an estimated growth rate of 3.6% for 2023.
Outset Medical’s earnings surpassed estimates in three of the trailing four quarters and missed once, with the average surprise being 2.3%.
Monte Rosa Therapeutics, Inc. (GLUE - Free Report) has an Earnings ESP of +1.33% and a Zacks Rank of 2. GLUE has a growth rate of 1.4% for 2024.
Monte Rosa’s earnings surpassed estimates in all the trailing four quarters, with the average surprise being 3.8%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.