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Becton, Dickinson and Company (BDX - Free Report) , popularly known as BD, delivered adjusted earnings per share (EPS) of $2.68 in the first quarter of fiscal 2024, down 10.1% year over year. The figure topped the Zacks Consensus Estimate by 12.1%.
The adjustments include expenses related to purchase accounting adjustments and integration costs, among others.
GAAP EPS for the quarter was 96 cents, reflecting a decline of 43.5% from the year-earlier figure.
Revenues in Detail
BD registered revenues of $4.71 billion in the fiscal first quarter, up 2.6% year over year. The figure missed the Zacks Consensus Estimate by 0.6%.
At constant exchange rate (CER), revenues climbed 1.6%.
The top-line improvement primarily resulted from robust performances by BD’s Medical and Interventional segments.
The organic revenue growth for the fiscal first quarter was 2.4%.
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 $2.23 billion, up 3.5% from the year-ago quarter on a reported basis, 2.4% at CER and 2.4% on an organic basis. Per management, this upside can be attributed to strength in Medication Management Solutions and Pharmaceutical Systems (PS) business units. This compares to our projection of fiscal first-quarter segmental revenues of $2.32 billion.
Worldwide revenues in the BD Life Sciences segment totaled $1.29 billion, down 1% year over year on a reported basis, 2.5% at CER and 2.5% on an organic basis. The segment’s performance reflected a decline in the Integrated Diagnostic Solutions business unit, which was partially offset by growth in the Biosciences unit. The fiscal first-quarter revenues compare to our estimate of $1.25 billion.
BD Interventional segment generated worldwide revenues of $1.19 billion, up 5.2% from the year-ago quarter on a reported basis, 4.7% at CER and 8.4% on an organic basis. This was due to strength in Surgery and Urology & Critical Care business units. The fiscal first-quarter revenues compare to our estimate of $1.16 billion.
Geographic Results
In the first quarter of fiscal 2024, revenues in the United States improved 0.7% to $2.75 billion. This compares to our estimate of $2.72 billion.
International revenues grossed $1.96 billion, up 5.5% from the year-ago quarter on a reported basis and 2.9% at CER. This compares to our estimate of $2.01 billion.
Becton, Dickinson and Company Price, Consensus and EPS Surprise
In the quarter under review, BD’s gross profit declined 4.9% to $2.03 billion. The gross margin contracted 344 basis points (bps) to 43.1%.
Selling and administrative expenses increased 2.2% to $1.21 billion. Research and development expenses decreased 7.3% year over year to $290 million. Adjusted operating expenses of $1.50 billion increased 0.2% year over year.
Adjusted operating profit totaled $524 million, reflecting a 17.2% plunge from the year-ago quarter. The adjusted operating margin in the fiscal first quarter contracted 267 bps to 11.1%.
Financial Position
BD exited first-quarter fiscal 2024 with cash and cash equivalents and short-term investments of $1.18 billion compared with $1.42 billion at the fiscal 2023-end. Total debt (including current debt obligations) at the end of first-quarter fiscal 2024 was $16.11 billion compared with $15.88 billion at the fiscal 2023-end.
Net cash provided by continuing operating activities at the end of first-quarter fiscal 2024 was $855 million compared with $399 million a year ago.
Meanwhile, BD has a consistent dividend-paying history, with its five-year annualized dividend growth being 4.50%.
Fiscal 2024 Guidance
BD has revised its financial outlook for fiscal 2024.
BD now projects its full fiscal year revenues in the range of $20.2 billion-$20.4 billion, up from the earlier projection of $20.1 billion-$20.3 billion. The Zacks Consensus Estimate is pegged at $20.20 billion.
For fiscal 2024, organic revenue growth is now expected to be between 5.5% and 6.25%, narrowed from the prior outlook of 5.25% and 6.25%.
The revenue growth at CER is expected to be in the range of 4.75-5.5%, narrowed from the prior outlook of 4.5-5.5%.
For the full fiscal year, adjusted EPS is anticipated to be in the range of $12.82-$13.06, representing growth of 5-7%. This is up from the earlier projection of $12.70-$13.00, representing growth of 4-6.5%. The Zacks Consensus Estimate is pegged at $12.83.
Our Take
BD exited the first quarter of fiscal 2024 with better-than-expected earnings. Solid top-line results, along with improvements in organic revenues, were impressive. Robust performances by its Medical and Interventional segments and both geographic regions were encouraging. Strength in most of BD’s segment’s business units during the reported quarter was also promising.
In December 2023, BD received the FDA’s 510(k) clearance for the BD MiniDraw Capillary Blood Collection System. In November, the company launched the SiteRite 9 Ultrasound System. These also raise our optimism about the stock.
However, lower-than-expected revenues and dismal bottom-line results were disappointing. Medication Delivery Solutions unit’s softness in China, driven by market dynamics, and the PS unit’s customer inventory dynamics, including a slowdown in demand for anticoagulants, were also concerning. Rising product costs put pressure on the margins, leading to the contraction of both margins, which do not bode 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 Elevance Health, Inc. (ELV - Free Report) , HCA Healthcare, Inc. (HCA - Free Report) and Stryker Corporation (SYK - Free Report) .
Elevance Health, carrying a Zacks Rank of 2 (Buy), reported fourth-quarter 2023 adjusted earnings per share (EPS) of $5.62, beating the Zacks Consensus Estimate by 1.3%. Revenues of $42.45 billion outpaced the consensus mark by 1.5%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Elevance Health has a long-term estimated growth rate of 12%. ELV’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 3.1%.
HCA Healthcare reported fourth-quarter 2023 adjusted EPS of $5.90, beating the Zacks Consensus Estimate by 16.8%. Revenues of $17.30 billion surpassed the Zacks Consensus Estimate by 4.5%. It currently carries a Zacks Rank #2.
HCA Healthcare has a long-term estimated growth rate of 9.6%. HCA’s earnings surpassed estimates in three of the trailing four quarters and missed once, the average surprise being 9.8%.
Stryker reported fourth-quarter 2023 adjusted EPS of $3.46, beating the Zacks Consensus Estimate by 5.8%. Revenues of $5.82 billion surpassed the Zacks Consensus Estimate by 3.8%. It currently carries a Zacks Rank #2.
Stryker has a long-term estimated growth rate of 10.2%. SYK’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 5.1%.
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BD (BDX) Q1 Earnings Surpass Estimates, Margins Contract
Becton, Dickinson and Company (BDX - Free Report) , popularly known as BD, delivered adjusted earnings per share (EPS) of $2.68 in the first quarter of fiscal 2024, down 10.1% year over year. The figure topped the Zacks Consensus Estimate by 12.1%.
The adjustments include expenses related to purchase accounting adjustments and integration costs, among others.
GAAP EPS for the quarter was 96 cents, reflecting a decline of 43.5% from the year-earlier figure.
Revenues in Detail
BD registered revenues of $4.71 billion in the fiscal first quarter, up 2.6% year over year. The figure missed the Zacks Consensus Estimate by 0.6%.
At constant exchange rate (CER), revenues climbed 1.6%.
The top-line improvement primarily resulted from robust performances by BD’s Medical and Interventional segments.
The organic revenue growth for the fiscal first quarter was 2.4%.
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 $2.23 billion, up 3.5% from the year-ago quarter on a reported basis, 2.4% at CER and 2.4% on an organic basis. Per management, this upside can be attributed to strength in Medication Management Solutions and Pharmaceutical Systems (PS) business units. This compares to our projection of fiscal first-quarter segmental revenues of $2.32 billion.
Worldwide revenues in the BD Life Sciences segment totaled $1.29 billion, down 1% year over year on a reported basis, 2.5% at CER and 2.5% on an organic basis. The segment’s performance reflected a decline in the Integrated Diagnostic Solutions business unit, which was partially offset by growth in the Biosciences unit. The fiscal first-quarter revenues compare to our estimate of $1.25 billion.
BD Interventional segment generated worldwide revenues of $1.19 billion, up 5.2% from the year-ago quarter on a reported basis, 4.7% at CER and 8.4% on an organic basis. This was due to strength in Surgery and Urology & Critical Care business units. The fiscal first-quarter revenues compare to our estimate of $1.16 billion.
Geographic Results
In the first quarter of fiscal 2024, revenues in the United States improved 0.7% to $2.75 billion. This compares to our estimate of $2.72 billion.
International revenues grossed $1.96 billion, up 5.5% from the year-ago quarter on a reported basis and 2.9% at CER. This compares to our estimate of $2.01 billion.
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 declined 4.9% to $2.03 billion. The gross margin contracted 344 basis points (bps) to 43.1%.
Selling and administrative expenses increased 2.2% to $1.21 billion. Research and development expenses decreased 7.3% year over year to $290 million. Adjusted operating expenses of $1.50 billion increased 0.2% year over year.
Adjusted operating profit totaled $524 million, reflecting a 17.2% plunge from the year-ago quarter. The adjusted operating margin in the fiscal first quarter contracted 267 bps to 11.1%.
Financial Position
BD exited first-quarter fiscal 2024 with cash and cash equivalents and short-term investments of $1.18 billion compared with $1.42 billion at the fiscal 2023-end. Total debt (including current debt obligations) at the end of first-quarter fiscal 2024 was $16.11 billion compared with $15.88 billion at the fiscal 2023-end.
Net cash provided by continuing operating activities at the end of first-quarter fiscal 2024 was $855 million compared with $399 million a year ago.
Meanwhile, BD has a consistent dividend-paying history, with its five-year annualized dividend growth being 4.50%.
Fiscal 2024 Guidance
BD has revised its financial outlook for fiscal 2024.
BD now projects its full fiscal year revenues in the range of $20.2 billion-$20.4 billion, up from the earlier projection of $20.1 billion-$20.3 billion. The Zacks Consensus Estimate is pegged at $20.20 billion.
For fiscal 2024, organic revenue growth is now expected to be between 5.5% and 6.25%, narrowed from the prior outlook of 5.25% and 6.25%.
The revenue growth at CER is expected to be in the range of 4.75-5.5%, narrowed from the prior outlook of 4.5-5.5%.
For the full fiscal year, adjusted EPS is anticipated to be in the range of $12.82-$13.06, representing growth of 5-7%. This is up from the earlier projection of $12.70-$13.00, representing growth of 4-6.5%. The Zacks Consensus Estimate is pegged at $12.83.
Our Take
BD exited the first quarter of fiscal 2024 with better-than-expected earnings. Solid top-line results, along with improvements in organic revenues, were impressive. Robust performances by its Medical and Interventional segments and both geographic regions were encouraging. Strength in most of BD’s segment’s business units during the reported quarter was also promising.
In December 2023, BD received the FDA’s 510(k) clearance for the BD MiniDraw Capillary Blood Collection System. In November, the company launched the SiteRite 9 Ultrasound System. These also raise our optimism about the stock.
However, lower-than-expected revenues and dismal bottom-line results were disappointing. Medication Delivery Solutions unit’s softness in China, driven by market dynamics, and the PS unit’s customer inventory dynamics, including a slowdown in demand for anticoagulants, were also concerning. Rising product costs put pressure on the margins, leading to the contraction of both margins, which do not bode 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 Elevance Health, Inc. (ELV - Free Report) , HCA Healthcare, Inc. (HCA - Free Report) and Stryker Corporation (SYK - Free Report) .
Elevance Health, carrying a Zacks Rank of 2 (Buy), reported fourth-quarter 2023 adjusted earnings per share (EPS) of $5.62, beating the Zacks Consensus Estimate by 1.3%. Revenues of $42.45 billion outpaced the consensus mark by 1.5%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Elevance Health has a long-term estimated growth rate of 12%. ELV’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 3.1%.
HCA Healthcare reported fourth-quarter 2023 adjusted EPS of $5.90, beating the Zacks Consensus Estimate by 16.8%. Revenues of $17.30 billion surpassed the Zacks Consensus Estimate by 4.5%. It currently carries a Zacks Rank #2.
HCA Healthcare has a long-term estimated growth rate of 9.6%. HCA’s earnings surpassed estimates in three of the trailing four quarters and missed once, the average surprise being 9.8%.
Stryker reported fourth-quarter 2023 adjusted EPS of $3.46, beating the Zacks Consensus Estimate by 5.8%. Revenues of $5.82 billion surpassed the Zacks Consensus Estimate by 3.8%. It currently carries a Zacks Rank #2.
Stryker has a long-term estimated growth rate of 10.2%. SYK’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 5.1%.