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Becton Dickinson (BDX) Up 2.3% Since Last Earnings Report: Can It Continue?

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It has been about a month since the last earnings report for Becton Dickinson (BDX - Free Report) . Shares have added about 2.3% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Becton Dickinson due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.

BD Q1 Earnings Match Estimates, Guidance Retained

BD posted first-quarter fiscal 2019 earnings per share (EPS) of $2.70, which were in line with the Zacks Consensus Estimate. The bottom line improved 8.9% on a year-over-year basis and 14.9% at cc.

The company raked in revenues of $4.16 billion, missing the Zacks Consensus Estimate by 0.1%. The reported figure surged 35.1% from the year-ago quarter. At cc, revenues rose 5.2%.

Segment Details

BD Medical

In the quarter under review, BD Medical posted worldwide revenues of $2.14 billion, up 15.3% from the year-ago quarter and 17% at cc, primarily due to the acquisition of C. R. Bard. Per management, the segment's results were driven by strong performance by the Medication Management Solutions and Pharmaceutical Systems sub-units.

BD Life Sciences

Worldwide revenues in the segment totaled $1.06 billion, up 1.1% year over year and 3% at cc. Per management, revenue growth was primarily driven by strong performance by the Preanalytical Systems sub-unit.

BD Interventional

This segment posted worldwide revenues of $0.97 billion, significantly up from the year-ago $183 million. At cc, revenues grew 37.1%. The segment's results reflect strong performance by the Surgery and Urology and Critical Care sub-units.

Geographic Results

US

In the fiscal first quarter, revenues in the United States shot up 44.1% to $2.39 billion, primarily backed by the acquisition of C. R. Bard. Revenues grew 6% at cc. Per management, revenue growth in the United States was primarily driven by very strong performance by the three major segments.

International

Revenues outside the United States grossed $1.77 billion, up 24.6% from the year-ago quarter, thanks to the acquisition of C. R. Bard. At cc, revenues at the segment grew 4.1%. Per management, international revenue growth in the fiscal first quarter was driven by strong performances in China and the rest of Asia as well as Latin America.

Margin Analysis

In the quarter, gross profit amounted to $1.97 billion, up 27% from the prior-year quarter tally. Gross margin was 47.4%, down 300 basis points (bps).

Operating income in the quarter grossed $888 million, up significantly from the year-ago quarter’s $235 million.

Adjusted operating income summed $642 million, up 9% on a year-over-year basis. As a percentage of revenues, operating margin in the quarter was 15%, down 410 bps year over year.

Guidance

On a reported basis, BD continues to expect fiscal 2019 revenue growth of 8.5-9.5%, primarily owing to the C. R. Bard acquisition. At cc, the same metric is anticipated to increase 5-6%.

For fiscal 2019, adjusted EPS is projected between $12.05 and $12.15, reflecting growth of 13-14% at cc and 10% compared to fiscal 2018.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in fresh estimates. The consensus estimate has shifted -10.8% due to these changes.

VGM Scores

Currently, Becton Dickinson has a poor Growth Score of F, however its Momentum Score is doing a lot better with a C. Following the exact same course, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Becton Dickinson has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.




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