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Becton Dickinson Fiscal Q2 Revenues up 15 Percent

NEW YORK – Becton Dickinson reported on Thursday morning that its fiscal second quarter revenues increased approximately 15 percent year over year.

For the three months ended March 31, BD posted revenues of $4.91 billion compared to $4.25 billion in the year-ago quarter and slightly ahead of analysts' average estimate of $4.89 billion. On a currency-neutral basis, Q2 revenues increased just over 12 percent, BD said.

In a separate announcement Thursday morning, BD also said that it will spin off its diabetes care business into an independent, publicly traded company. It expects to complete the transaction in the first half of 2022. In fiscal year 2020, the diabetes care business generated revenues of around $1.1 billion.

"With our announced intention to spin off our diabetes business to shareholders, we are taking another bold step in our BD 2025 strategy, which focuses on unleashing our growth potential, delivering innovations for our customers, empowering our associates, and creating value for our shareholders," CEO Tom Polen said in a statement.

In Q2 BD's medical segment revenues were up around 7 percent to $2.31 billion from $2.15 billion a year ago.

BD life sciences revenues increased 43 percent to $1.59 billion from $1.11 billion in the prior-year quarter. Within the segment, integrated diagnostic systems revenues rose 51 percent to $1.26 billion from $833 million, and biosciences revenues increased 16 percent to $325 million from $280 million.

Within integrated diagnostic systems, BD saw sales related to COVID-19 diagnostic testing of $480 million, which the firm said included $290 million related to BD Veritor Plus systems and the remaining revenues related to BD Max COVID-19 tests, specimen collection, and transport products. BD noted that growth in the segment was unfavorably impacted by the lack of an influenza season in 2021, and that although routine diagnostic testing had not fully recovered to pre-pandemic levels, the firm saw growth in settings such as specimen management and ID/AST testing.

Excluding COVID-19 diagnostic testing, BD came in ahead of its prior expectations across all core business segments, the firm's CFO Chris Reidy said on a call with investors and analysts Thursday morning. However, "Looking at our IDS business, excluding COVID testing, our routine diagnostic testing has not yet fully recovered to pre-COVID-19 levels," Reidy said.

Polen also said on the call that the firm's at-home SARS-CoV-2 antigen test continues in development. "Our test is designed to deliver a clear, digitally displayed record of test results on a smartphone, to eliminate the reading guesswork," Polen said, adding that the design also allows the data to be digitally shared by the user "to eliminate errors in report sharing."

In the quarter, the firm and partner CerTest Biotec announced the addition of saliva to the CE marked Viasure SARS-CoV-2 (N1 + N2) Real Time PCR Detection Kit for the BD Max system. The firm was also granted EUA for the BD Veritor Plus System rapid antigen test to be used for SARS-CoV-2 screening through serial testing of asymptomatic individuals as well as an EUA for a combined flu and COVID-19 rapid antigen test and EUA and CE mark for a combined flu and COVID-19 molecular test on the BD Max.

BD also announced in the quarter a collaboration with Scanwell Health to create an at-home rapid test for SARS-CoV-2 using a BD antigen test and the Scanwell Health mobile app.

BD interventional segment revenues grew 2 percent to $1.01 billion from $990 million, driven by growth in its peripheral intervention, urology, and critical care units

Geographically, revenues from the company's US business were up approximately 2 percent to $2.46 billion from $2.42 billion a year ago, while revenues from international markets increased 33 percent to $2.45 billion from $1.84 billion in Q2 2020 primarily driven by COVID-19 diagnostic testing-related sales.

BD's net income applicable to common shareholders for the quarter was $277 million, or $.94 per share, compared to net income of $145 million, or $.53 per share, a year ago. Adjusted EPS for the recently completed quarter was $3.19, above the consensus Wall Street estimate of $3.04.

BD's R&D expenses increased 20 percent to $317 million from $264 million in Q2 2020, and its SG&A costs increased 12 percent to $1.15 billion from $1.03 billion a year ago.

BD finished the quarter with $3.73 billion in cash and cash equivalents, $164 million in restricted cash, and $24 million in short-term investments.

The company reaffirmed its fiscal year 2021 guidance for revenue growth of 12 percent to 14 percent on a reported basis and adjusted diluted EPS of between $12.75 and $12.85.

In morning trading on the Nasdaq, shares of BD were down 4 percent to $240.33.