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What’s Favoring BD?

BD is focused on overseas expansion, in particular, emerging markets. In the recently reported third quarter of fiscal 2018, BD delivered strong sales internationally, which totaled $1.94 billion, up 35.4% from the year-ago quarter and 5.1% at constant currency (cc).

Per management, overseas revenue growth was driven by strong performance by the BD Life Sciences segment as well as the Medication Delivery Solutions and Medication Management Solutions units. The Surgery and Peripheral Intervention units in the BD Interventional segment also drove growth.

Emerging markets revenues grew 10.5%. Revenues in China rose 13.2%, driven by double-digit growth in the Life Sciences and Interventional segments. In addition, revenues in Latin America grew high single digits.

Buoyed by a solid fiscal third-quarter show, BD lifted its guidance for fiscal 2018. The company expects sales to improve 31.5% on a reported basis in 2018, compared to the previous range of 31-31.5%. At cc, revenues are expected to grow 5.5%, compared to the previous range of 5-5.5%.

Earnings are expected within $10.95-$11.05 compared with the previous $10.90-$11.05. This represents growth of approximately 15.5-16.5% over fiscal 2017 and 12% at cc.

Per management, the acquisition of C.R. Bard is expected to prove accretive to adjusted earnings per share on high single-digit basis in fiscal 2019.

Deterrents

Within its Diabetes Care business, BD has temporarily paused shipments of its insulin infusion sets. This was due to a moderately-higher-than-anticipated rate of complaints associated with insertion that occurred during the pilot launch of the product. However, BD is continuing to work closely with Medtronic MDT toward full commercialization of the product.

Moreover, in the Life Sciences business, management at BD confirmed that a few customers have reported issues pertaining to the Barricor blood collection tubes.

BD also generates more than half of its revenues from international operations. Fluctuations in foreign currency exchange rates adversely affect these revenues.

Moreover, lower reimbursements for medical products and services may negatively impact prices of BD’s products.

Posted by on August 13th, 2018 at 11:39 am


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