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BD Q4 Revenues Rise 4 Percent, Beat Estimates

NEW YORK – Becton Dickinson reported on Thursday that its fiscal fourth quarter revenues increased approximately 4 percent year over year driven by SARS-CoV-2 test sales.

For the three months ended Sept. 30, the Franklin Lakes, New Jersey company posted revenues of $4.78 billion compared to $4.58 billion in the year-ago quarter, and above the analysts' average estimate of $4.48 billion. On a currency-neutral basis, Q4 revenues increased about 4 percent over the prior year.

"We delivered sequential improvement across each of our segments and successfully launched our Veritor SARS-CoV-2 assay," said Tom Polen, CEO and president of BD, in a statement. "We drove mid-single-digit revenue growth," he added, noting that the COVID-19 diagnostics revenues to overcame headwinds from the pandemic effects on non-COVID hospital procedures.

BD's Medical segment brought in $2.32 billion, a 5 percent decrease over $2.44 billion reported a year ago.

BD Life Sciences recorded $1.49 billion in revenues, up 31 percent from $1.13 billion in Q4 2019. Within the segment, preanalytical systems revenues fell 4 percent to $378 million from $393 million, while diagnostic systems revenues were up 97 percent to $807 million from $409 million, and biosciences revenues declined 9 percent to $303 million from $332 million. 

The firm credited the Life Sciences segment growth to strong sales related to COVID-19 diagnostic testing solutions in the Diagnostic Systems unit on the BD Veritor and BD Max platforms, and noted that routine diagnostic testing and research-related activity improved sequentially from the prior quarter but remained below pre-COVID levels. Total COVID-19 testing sales were more than $440 million in the fourth fiscal quarter, BD said. 

BD Interventional segment revenues in the quarter fell 3 percent to $978 million from $1.01 billion a year ago.

Revenues from the company's US business was up 7 percent to $2.75 billion from $2.56 billion a year ago, while revenues from international markets were up approximately 1 percent at $2.03 billion from $2.02 billion in Q4 2019.

During the fiscal fourth quarter the company received CE mark for several products in Life Sciences, including a combination SARS-CoV-2, influenza, and respiratory syncytial virus test for the BD MAX in partnership with CerTest Biotec; a product for assessing immune function in COVID-19 patients; and the SARS-Cov-2 assay for the BD Veritor Plus system.

The firm also received 510(k) clearance from the US Food and Drug Administration for the BD FACSLyric Flow Cytometer with the Integrated BD FACSDuet Sample Preparation System, and it submitted a premarket approval supplement to the FDA for the use of the ThinPrep Pap Test PreservCyt Solution vial as an approved sample type for its BD Onclarity HPV Assay.

To date, BD said it has received global commitments for over 800 million injection devices in preparation for COVID vaccination campaigns.

BD's net income for Q4 was $128 million, or $0.36 per share, compared to a net income of $163 million, or $.45 per share, a year ago.

On an adjusted basis, the company reported Q4 EPS of $2.79, edging the Wall Street estimate of $2.52 per share.

BD's R&D expenses increased 11 percent year over year to $299 million from $270 million, and its sales and administrative costs increased 10 percent to $1.20 billion from $1.09 billion.

For full- year 2020, BD reported revenues of $17.12 billion, down 1 percent from $17.29 billion in 2019.

BD Medical revenues in fiscal 2020 fell 4 percent year over year to $8.68 billion from $9.06 billion, while BD Life Sciences revenues increased 9 percent to $4.68 billion from $4.30 billion.

Within Life Sciences, preanalytical systems revenues were down 5 percent year over year to $1.49 billion from $1.56 billion, and diagnostics systems revenues grew 32 percent to $2.05 billion from $1.55 billion. Bioscience revenues fell approximately 4 percent to $1.14 billion from $1.19 billion.

BD Interventional segment revenues for the full year declined 4 percent to $3.76 billion from $3.93 billion a year ago.

On a full-year basis, revenues from the company's US business was flat at $9.72 billion, while revenues from international markets fell approximately 2 percent to $7.40 billion from $7.56 billion in Q4 2019.

On a call with investors, Polen said that BD doubled its installed base of Veritor units in the US in fiscal 2020. The total is now 50,000 units, and the firm expects to add unique menu items tailored to the needs of the new markets it has entered due to the pandemic, such as the nursing home space. BD has also achieved its manufacturing goals of 8 million Veritor tests per month by October, and expects to manufacture 12 million per month by March 2021. The Veritor instrument costs in the range of $250 to $300, Polen said, with an average selling price of $20 per test.

The firm saw $580 million in COVID-related revenues in the year, and BD is now developing combination SARS-CoV-2 and influenza tests for both its Veritor immunoassay platform and its BDMax system.

Taking into consideration variables such as SARS-CoV-2 vaccine availability and adoption, "We are comfortable forecasting fiscal 2021 Veritor testing in the range of $1 billion to $1.5 billion, with the weighting of these revenues being more in the first half of the fiscal year than the second," Polen said, adding that BD sees a likelihood for some degree of testing to continue into fiscal 2022.

The firm also expects to bring the BD Cor system and Onclarity HPV assays, which are currently in use in Europe, to the US in 2021. 

BD has also seen a recovery in hospital use and access after a decline during the lockdowns early in the pandemic. This is allowing recovery of sales for products requiring more extensive installation procedures, such as the Keystra.

Polen said on the call that the firm had six tuck-in acquisitions in fiscal 2020, highlighting in particular the acquisition of point-of-care molecular diagnostic instrument developer NATDx. 

For 2019, BD's net income was $874 million, or $2.71 per share, compared to $1.08 billion, or $3.94 per share, in 2019. The firm reported adjusted full-year earnings per share of $10.20. The consensus Wall Street estimate was for EPS of $9.93.

BD's R&D expenses for 2019 rose 3 percent year over year to $1.10 billion from $1.06 billion, and its sales and administrative costs were flat at $4.33 billion.

For fiscal 2021, BD provided guidance for revenue growth in the high single to low double-digits on a percentage basis, and adjusted diluted earnings per share to be between $12.40 and $12.60.

In Thursday morning trade on the New York Stock Exchange, shares of BD were up 1 percent at $234.45.