Becton, Dickinson and Company (BDX Quick QuoteBDX - Free Report) , also known as BD, reported fourth-quarter fiscal 2019 earnings per share (EPS) of $3.31, which beat the Zacks Consensus Estimate by a penny. The bottom line also improved 13% on a year-over-year basis and rose 12.3% at constant currency (cc).

The Zacks Rank #4 (Sell) company raked in revenues of $4.58 billion, surpassing the Zacks Consensus Estimate of $4.57 billion. The reported figure increased 4.1% from the year-ago quarter. At cc, revenues rose 6.2%.

FY19 at a Glance

On a full-year basis, BD’s revenues increased 8.2% to $17.29 billion, beating the Zacks Consensus Estimate of $17.27 billion. Adjusted EPS was $11.68, up 6.1%. The metric was in line with the Zacks Consensus Estimate.

BD reports through three major segments — BD Medical, BD Life Sciences and BD Interventional.

BD Medical sales were $9.06 billion (52.4% of net sales), BD Life Sciences sales totaled $4.30 billion (24.9%) and BD Interventional sales were $3.93 billion (21.9%).

 

 

In the quarter under review, the company reported worldwide revenues of $2.44 billion, up 3.9% from the year-ago quarter and 5.3% at cc. Per management, the segment's results were driven by performance in the Medication Management Solutions, Medication Delivery Solutions and Pharmaceutical Systems units.

 

 

Worldwide revenues in the segment totaled $1.13 billion, up 2.3% year over year and 6.9% at cc. Per management, the upside was driven by solid performance in the Diagnostic Systems and Biosciences units.

 

 

This segment generated worldwide revenues of $1.01 billion, up 6.9% from the year-ago quarter. At cc, revenues grew 7.7% on strong performance by the Urology and Critical Care and Surgery sub-units.

 

 

 

In the fiscal fourth quarter, revenues in the United States improved 4.6% to $2.56 billion. Revenues grew 4.9% at cc. Per management, growth in the United States was driven by good performance by the BD Medical, BD Life Sciences and the Surgery and Urology and Critical Care units within the BD Interventional segment.

 

 

Revenues outside the United States grossed $2.02 billion, up 3.5% from the year-ago quarter. At cc, the segment grew 7.9%. Per management, international revenue growth in the fourth quarter was strong in APAC and EMEA.

 

 

In the quarter, gross profit amounted to $2.27 billion, up 8.3% from the prior-year quarter tally. Gross margin was 49.4%, up 190 bps from the prior-year quarter.

 

Operating income in the quarter grossed $111 million, down significantly from the year-ago quarter’s figure of $576 million. As a percentage of revenues, operating margin in the quarter was 2.4%, significantly down from year-ago quarter’s 13.1%.

 

Adjusted operating income amounted to $902 million, up 26.2% from the year-ago figure.

 

 

The company expects fiscal 2020 revenues to increase 4-4.5% year over year and 5-5.5% at cc. The Zacks Consensus Estimate is pegged at $18.13 billion.

 

Adjusted EPS is expected between $12.50 and $12.65, indicating growth of 7-8.5% from fiscal 2019. At cc, growth is expected between 9.5% and 11%. The Zacks Consensus Estimate for the same stands at $12.92, higher than the guided range.

 

 

BD exited the fiscal fourth quarter on a strong note. Solid performance by the core BD Medical and Interventional segments instills optimism in the stock. Domestic revenues increased year over year in the quarter under review, driven by segmental strength. Growth in Europe and APAC is another positive. Expansion in gross margin is also encouraging. BD has issued a solid guidance for fiscal 2020.

 

Meanwhile, a drop in operating margin raises concern. Management expects unfavorable foreign currency to partially mar BD’s bottom line in fiscal 2020. Competition in the MedTech space is stiff.