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Becton, Dickinson Hits 52-Week High

Zacks Equity Research

Shares of Becton, Dickinson and Company (BDX) reached a new 52-week high of $117.26 on Mar 31 eventually closing at $117.08 on the same day. In fact, shares of this NJ-based manufacturer and developer of medical instruments and supplies have been gaining momentum since it reported strong first-quarter fiscal 2014 (ended Dec 31, 2013) results on Feb 4.

The company's share price has recorded a healthy return of around 25% over a year.  Its long-term estimated EPS growth rate is pegged at 9.1%.

Strong First-Quarter Performance

Becton, Dickinson, a Zacks Rank #2 (Buy) stock, reported impressive first-quarter results, reflecting year-over-year increases both in revenues and adjusted earnings. Adjusted earnings per share reached $1.42 in the quarter, beating the Zacks Consensus Estimate of $1.29 by 10.1%. Earnings also rose 5.2% year over year, better than the company's earnings expectations for the quarter, primarily on the back of higher revenues.

Revenues were $2,015 million, up 6% year over year, beating the Zacks Consensus Estimate by 1.8%. On a geographical basis, while improved growth was observed in the European end-markets, stability in growth was seen in the U.S. Factors like safety sales, Bioscience development and the benefit of timing in Pharmaceutical Systems contributed to strong growth, particularly in Western Europe.

On a segment basis, worldwide revenues of BD Medical Segment increased 8.2% year over year to $1,064 million, owing to strong sales in the Medical Surgical Systems and Diabetes Care units, and solid sales in the Pharmaceutical Systems unit. Likewise, international expansion in both the Preanalytical Systems and Diagnostics Systems business units caused revenues from the BD Biosciences segment to increase 5.4% year over year to $279 million.  

Becton, Dickinson's research and development expenses climbed 6.4% to $126 million, reflecting the rise in investment in new products and platforms within the Medical and Biosciences segments. Higher investment gains on assets related to the company's deferred compensation plan resulted in a solid 75% increase in its interest income, which amounted to $14 million in the first quarter.

During the first quarter, Becton, Dickinson repurchased about $190 million of its anticipated $450 million full-year 2014 share repurchase authorization.  

Subsequent to the earnings release, most of the earnings estimates were revised upward for fiscal 2014 and 2015. Over the last 60 days, the Zacks Consensus Estimate has risen 0.3% to $6.23 for fiscal 2014 and 0.4% to $6.80 for fiscal 2015.

Other Stocks to Consider

Other stocks worth a look in the medical industry include Align Technology Inc. (ALGN), CR Bard Inc. (BCR) and The Cooper Companies Inc. (COO). All these stocks carry a Zacks Rank #2 (Buy).

Read the Full Research Report on BCR
Read the Full Research Report on ALGN
Read the Full Research Report on BDX
Read the Full Research Report on COO

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