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BD Life Sciences to Aid Becton, Dickinson (BDX) Q1 Earnings

Zacks Equity Research

Becton, Dickinson and Company’s BDX, popularly known as BD, first-quarter fiscal 2020 results are scheduled for release on Feb 6, before market opens. While the results are likely to show steady growth in the core BD Life Sciences segment, foreign exchange and tariff headwinds are expected to leave an impact.

BD delivered a positive earnings surprise of 0.3% in the last reported quarter and has a positive average earnings surprise of 0.5% for the trailing four quarters.

How Are Estimates Placed?

For the quarter to be reported, the Zacks Consensus Estimate for BD’s adjusted earnings per share (EPS) is pegged at $2.64, suggesting a year-over-year decline of 2.2%. The same for revenues stands at $4.17 billion, indicating an increase of 0.2%.

Let’s see how things are shaping up prior to the earnings release.

Becton, Dickinson and Company Price and EPS Surprise


Becton, Dickinson and Company Price and EPS Surprise

Becton, Dickinson and Company price-eps-surprise | Becton, Dickinson and Company Quote

BD Life Sciences Likely to Hold Key

In the first quarter, BD Life Sciences is expected to have benefited from strong year-over-year growth in revenues from assays, which are used to detect a broad range of infectious diseases, healthcare-associated infections and cancer.

It is encouraging to note that for the fiscal first quarter, the Zacks Consensus Estimate for the segment’s revenues is pegged at $1.09 billion, suggesting a year-over-year rise of 2.8%. Notably, strong performance by the Diagnostic Systems and Biosciences sub-units is expected to have worked in favor. In fact, the Zacks Consensus Estimate for the Biosciences sub-unit is pinned at $294 million, calling for a rise of 4.6% year over year. The same for BD Diagnostic systems stands at $391 million, suggesting a 2.4% hike.

Also, strength in molecular platform — BD MAX and microbiology solutions are likely to be key catalysts. Management expects BD Life Sciences revenues to grow between 6% and 7%.

Other Factors at Play

Strong performance by the BD Interventional arm might reflect on the company’s first-quarter results.

BD expects its Critical Care business and the Arctic Sun Stat launch under its Interventional arm to have driven the segment’s first-quarter revenues. Resultantly, the Zacks Consensus Estimate for the segment’s first-quarter revenues is pegged at $994 million, indicating a rise of 2.5% year over year.

In the quarter to be reported, management expects BD Life Sciences and Interventional to see strong double-digit growth in China while BD Medical is likely to witness single-digit growth.

However, a strengthening U.S. dollar is expected to have impacted the segment’s overseas revenues.

That’s not all. Management at BD expects tariff and foreign currency-related headwinds to show on first-quarter results. Hence, BD projects lower-than-expected fiscal first-quarter EPS between $2.55 and $2.65.

What Does Our Model Say?

Per our proven model, a stock needs to have a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to deliver a positive earnings surprise. However, that 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’re reported with our Earnings ESP Filter.

Zacks Rank: BD carries a Zacks Rank #4 (Sell).

Stocks Worth a Look

Here are a few medical stocks worth considering as they have the right combination of elements to post an earnings beat this time around.

DexCom DXCM has an Earnings ESP of +12.27% and a Zacks Rank #2.

Change Healthcare CHNG has an Earnings ESP of +1.83% and a Zacks Rank #1.

Glaukos GKOS has an Earnings ESP of +17.65% and a Zacks Rank #3.

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