U.S. Markets closed

Can BD Medical Drive Becton, Dickinson's (BDX) Q1 Earnings?

Zacks Equity Research

Becton, Dickinson and Company’s BDX, popularly known as BD, first-quarter fiscal 2019 results are scheduled to release on Feb 5, before market opens. While the results are likely to show steady growth in the core BD Medical segment, BD Life Sciences may partially mar results.

Fiscal Q4 Results at a Glance

In the last reported quarter, BD posted earnings of $2.93 per share which surpassed the Zacks Consensus Estimate by a penny. The bottom line improved 22.1% on a year-over-year basis and 24.6% at constant currency (cc).

Revenues totaled $4.4 billion and outpaced the Zacks Consensus Estimate of $4.36 billion. The reported figure surged 39% from the year-ago quarter number, primarily owing to the acquisition of C. R. Bard. At cc, revenues rose 8.4%.

BD has an average positive earnings surprise of 0.4% for the trailing four quarters.

Which Way Are Q1 Estimates Treading?

For the quarter to be reported, the Zacks Consensus Estimate for BD’s earnings per share is pegged at $2.59, showing a year-over-year increase of 4.4%. The same for revenues stands at $4.10 billion, reflecting an increase of 33.3% year over year.

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

BD Medical Likely to Drive Q1 Earnings

BD Medical, one of the major revenue drivers of the company, is expected to drive the fiscal first-quarter results. Strong year-over-year growth of revenues from needles, syringes and intravenous catheters for medication delivery, prefilled IV flush syringes, syringes and pen needles for diabetes care and others are likely to boost the segment.

In the last reported quarter, BD Medical accounted for 53.4% of the company’s net revenues. The segment posted sales worth $2.35 billion, up 20.7% from the year-ago quarter and 10.1% at cc.

It is encouraging to note that, for the fiscal first quarter, the Zacks Consensus Estimate for the segment’s revenues is pegged at $2.11 billion, showing a year-over-year rise of 3.5%. Management expects BD Medical revenues to grow between 5% and 6% in fiscal 2019.

Coming to the subsegments, Medication Surgical Systems revenues grew 5.9% in the fourth quarter. The Zacks Consensus Estimate for first-quarter revenues is pegged at $957 million, up 3.5% on a year-over-year basis.

Diabetes Care revenues grew 1.7% in the fourth quarter. The Zacks Consensus Estimate for fourth-quarter revenues is pegged at $27 million, flat when compared to the year-ago period.

At Pharmaceutical Systems, revenues grew 9.4% in the fourth quarter. However, the Zacks Consensus Estimate for the fourth quarter is pinned at $243 million, down 0.4% on a year-over-year basis.

Becton, Dickinson and Company Price and EPS Surprise


Becton, Dickinson and Company Price and EPS Surprise | Becton, Dickinson and Company Quote

Other Factors at Play

Preliminary Results

Prior to the earnings release, BD posted impressive preliminary first-quarter results, which instils optimism in the stock.

Notably, revenues of $4.16 billion reflect a growth of 35.1% year over year and 5.2% at cc.

Preliminary adjusted earnings per share of $2.70 reflect a growth of 8.9% on a year-over-year basis and 14.9% at cc.

Resultantly, the company continues to expect fiscal 2019 revenue growth of 8.5-9.5%, driven by the C. R. Bard acquisition. At cc, revenues are anticipated to increase 5-6%. The Zacks Consensus Estimate for the same is pegged at $17.43 billion.

Fiscal 2019 adjusted earnings per share are expected in the band of $12.05-$12.15, mirroring growth of 10% from fiscal 2018. The Zacks Consensus Estimate stands at $12.11 per share.


BD has witnessed several developments in recent times which are expected to positively impact the quarter-to-be-reported results.

Last November, the company received FDA 510(k) clearance for its Phoenix CPO detect test. This will allow hospitals to identify infections caused by carbapenemase-producing organisms. (Read More: BD's FDA Nod for Phoenix Test Boosts Diagnostic Systems)

Moreover, management at BD remains optimistic about new products like Alaris Pump and Pyxis ES, BD MAX, BD FACSLyric, BD Horizon Brilliant dyes, Lutonix AV and Covera.


BD’s Life Sciences unit, which accounted for 25.2% of net sales in the last reported quarter, is likely to see a soft fiscal first quarter.

Notably, the Zacks Consensus Estimate for the segment’s first-quarter revenues is pinned at $1.04 billion, reflecting a decline of 0.5% year over year.

Additionally, management foresees some other headwinds which may dent results in fiscal 2019. For instance, raw material pricing pressure, which increased in 2018, is expected to accelerate into fiscal 2019 primarily due to resin price increases. Additionally, the round of tariffs enacted last September is likely to act against the company.

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 in the quarter. However, this is not the case here.

Earnings ESP: BD has an Earnings ESP of -1.05%. 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 #2.

Meanwhile, we caution against stocks with a Zacks Rank #4 (Sell) or 5 (Strong Sell) going into the earnings announcement, especially when the company is seeing negative estimate revision.

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 quarter.

PerkinElmer PKI has an Earnings ESP of +0.77% and a Zacks Rank #3.

DexCom DXCM has an Earnings ESP of +8.93% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Baxter International BAX has an Earnings ESP of +1.83% and a Zacks Rank #3.

Zacks' Top 10 Stocks for 2019

In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-holds for the year?

Who wouldn't? Our annual Top 10s have beaten the market with amazing regularity. In 2018, while the market dropped -5.2%, the portfolio scored well into double-digits overall with individual stocks rising as high as +61.5%. And from 2012-2017, while the market boomed +126.3, Zacks' Top 10s reached an even more sensational +181.9%.

See Latest Stocks Today >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
PerkinElmer, Inc. (PKI) : Free Stock Analysis Report
Baxter International Inc. (BAX) : Free Stock Analysis Report
DexCom, Inc. (DXCM) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research