BD (BDX) Gears Up for Q2 Earnings: What's in the Offing?
Becton Dickinson and Company BDX, popularly known as BD, is scheduled to report second-quarter fiscal 2023 results on May 4, before market open.
In the last reported quarter, the company’s earnings of $2.98 per share surpassed the Zacks Consensus Estimate by 11.6%. Over the trailing four quarters, its earnings outperformed the Zacks Consensus Estimate on all occasions, delivering an earnings surprise of 6.5%, on average.
Let’s check out the factors that are anticipated to have shaped BDX’s performance prior to this announcement.
Factors to Note
BD Life Sciences
On the first-quarter fiscal 2023 earnings call in February, BD confirmed that it continued to witness lower COVID-only testing revenues, which led to a decline in its Life Sciences segment. However, excluding COVID-only testing, an uptick in the Life Sciences segment’s base revenues was solid. Strong growth across Integrated Diagnostic Solutions ("IDS") and Biosciences ("BDB") business units was witnessed despite supply constraints.
Strength in IDS reflected strong base business revenue growth. This was driven by leveraging its increased BD MAX installed base for molecular In-Vitro Diagnostic assay growth and strong BD Kiestra lab automation installations. BDB unit has also been recording strong research reagent growth, and continued strong demand for its BD FACSymphony A1/A5 SE analyzers and BD FACSymphony S6 sorter.
These trends are likely to have continued in second-quarter fiscal 2023. This, in turn, is anticipated to have contributed to the strength in the base business despite the expected ceaseless fall in COVID-only testing revenues. This is likely to have significantly driven up segmental revenues.
BD has launched a few products in recent months. In February, a new instrument for single-cell multiomics analysis — BD Rhapsody HT Xpress System — was unveiled. This will enable scientists to run high-throughput studies, without compromising sample integrity.
In January, BD introduced a robotic track system for the BD Kiestra microbiology laboratory solution — the BD Kiestra 3rd Generation Total Lab Automation System — which automates lab specimen processing. These products are likely to have witnessed robust customer adoptions, thereby driving segmental revenues in the fiscal second quarter.
Becton, Dickinson and Company Price and EPS Surprise
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Over the past few months, BD has received a slew of regulatory approvals. In March, BD received the FDA’s 510(k) clearance for the BD Vaginal Panel on the BD COR System.
In February, BD received the FDA’s approval for the BD Onclarity HPV Assay to be used with the ThinPrep Pap Test. In the same month, BD received the FDA’s Emergency Use Authorization (EUA) for a new molecular diagnostic combination test for SARS-CoV-2, Influenza A + B and Respiratory Syncytial Virus — BD Respiratory Viral Panel assay for BD MAX System.
In January, BD and CerTest Biotec announced the receipt of EUA from the FDA for a molecular polymerase chain reaction (PCR) assay for Mpox virus detection — VIASURE Monkeypox Virus Real Time PCR Reagents for BD MAX System. These raise 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 second-quarter fiscal 2023.
The Zacks Consensus Estimate for BD Life Sciences revenues is pegged at $1.30 billion, suggesting a decline of 12.5% from the year-ago quarter’s reported figure.
We estimate the metric to be $1.33 billion, suggesting a decline of 10.3% from the year-ago quarter’s reported figure.
BD Interventional
The segment continued to witness a strong worldwide performance in Advanced Repair and Reconstruction in the first quarter of fiscal 2023. Continued strong market adoption of Phasix hernia resorbable scaffold and double-digit growth worldwide in biosurgery (aided by the Tissuemed acquisition) resulted in the upturn.
Revenues in Peripheral Intervention were also strong. Double-digit growth in Peripheral Vascular Disease on the back of the Venovo relaunch, the global penetration of Rotarex and the acquisition of Venclose (which addresses chronic venous insufficiency) acted as a tailwind.
Robust Urology and Critical Care revenues were driven by double-digit growth in BD PureWick (which addresses chronic incontinence) and Endourology. These trends are likely to have continued in the fiscal second quarter, thereby significantly driving segmental revenues.
The Zacks Consensus Estimate for BD Interventional revenues is pegged at $1.13 billion, suggesting an uptick of 1.5% from the year-ago quarter’s reported figure.
We estimate the metric to be $1.11 billion.
Other Factors to Note
BD is likely to have witnessed continued momentum in its Medical segment. The continued strong performance in vascular access management outside the United States and the robust adoption of its pre-fillable solutions in high-growth markets like biologic drugs and vaccines are expected to have resulted in this uptrend. BD is also anticipated to have benefited from the continued strength in the Pharmacy Automation solutions, including Parata and BD Rowa.
On the fiscal first-quarter earnings call, BD confirmed its launch of PosiFlush SafeScrub, a pre-filled flush syringe with an integrated disinfection device. The product is likely to have witnessed robust adoption in recent months, thereby driving revenues in the to-be-reported quarter.
Management confirmed that its new PowerMe midline catheter was cleared by the China regulatory agency NMPA and the company is expecting to launch it soon. This looks promising for the stock.
However, the current unstable macroeconomic business environment, resulting from supply-chain constraints and inflationary pressures, is likely to have weighed on the company’s fiscal second-quarter revenues, raising our apprehension.
Estimate Picture
For second-quarter fiscal 2023, the Zacks Consensus Estimate for revenues is pegged at $4.66 billion, implying a decline of 7% from the prior-year quarter’s reported figure.
Our model predicts revenues of $4.64 billion for the quarter to be reported.
The consensus estimate for earnings per share (EPS) is pegged at $2.75, indicating a decrease of 13.5% from the prior-year period’s reported number.
We estimate the fiscal second-quarter adjusted EPS to be $2.73.
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.
Earnings ESP: BD has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Zacks Rank: BD currently carries a Zacks Rank #3.
Stocks Worth a Look
Here are a few medical stocks worth considering, as these have the right combination of elements to beat on earnings this reporting cycle:
Cardinal Health, Inc. CAH has an Earnings ESP of +5.17% and a Zacks Rank of 2. CAH has an estimated long-term growth rate of 11.6%.
Cardinal Health’s earnings surpassed estimates in two of the trailing four quarters and missed twice, the average surprise being 6.4%.
BellRing Brands, Inc. BRBR has an Earnings ESP of +1.38% and is a Zacks #2 Rank stock. BRBR has an estimated long-term growth rate of 12.7%.
BellRing Brands’ earnings surpassed estimates in all the trailing four quarters, the average surprise being 19.1%.
Surrozen, Inc. SRZN has an Earnings ESP of +13.86% and sports a Zacks Rank of 1 at present. SRZN has an estimated long-term growth rate of 38.4%. You can see the complete list of today’s Zacks #1 Rank stocks here.
Surrozen’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 43.9%.
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Becton, Dickinson and Company (BDX) : Free Stock Analysis Report
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