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Becton Dickinson Fiscal Q2 Revenues Grow 2 Percent

NEW YORK – Becton Dickinson reported on Thursday morning that its fiscal second quarter revenues increased approximately 2 percent year over year. 

For the three months ended March 31, BD posted revenues of $5.01 billion compared to $4.91 billion in the year-ago quarter and ahead of analysts' average estimate of $4.85 billion. On a currency-neutral basis, Q2 revenues increased nearly 4 percent, BD said. 

"We delivered another quarter of strong growth across our base business ... despite a dynamic and challenging macro environment," CEO Tom Polen said in a statement. 

On a call with investors Thursday morning, Polen specified that BD saw base revenue growth of more than 10 percent on a currency-neutral basis. Regarding the macro challenges, he said the firm has invested in additional inventory to help secure access to scarce raw materials and electronic components, like semiconductor chips. BD has also directly contracted for alternative transport methods and invested in capacity expansion and regional supply chain sourcing, he said. 

However, Polen also said that COVID-19 mitigation efforts in China have had "an unexpected impact on healthcare procedures, lab testing, and the supply chain" in China, noting that the firm expects to offset the impact over the balance of the year, assuming there aren't additional COVID waves. 

BD saw sales related to COVID-19 diagnostic testing of $214 million, down from $474 million in the year-ago period. Excluding COVID-19 diagnostic testing, base revenues increased 8 percent to $4.80 billion from $4.43 billion. 

In Q2 BD's medical segment revenues were up around 5 percent to $2.42 billion from $2.31 billion a year ago. 

BD life sciences revenues declined approximately 6 percent to $1.49 billion from $1.59 billion in the prior-year quarter. Within the segment, integrated diagnostic systems revenues fell 9 percent to $1.15 billion from $1.26 billion, while biosciences revenues increased 3 percent to $335 million from $325 million. 

Within biosciences, BD said reagent sales growth was driven by improved lab activity, but the timing of instrument delivery was impacted by supply chain challenges for semiconductors and electronic components.  

BD interventional segment revenues grew 10 percent to $1.11 billion from $1.01 billion, driven by growth in its peripheral intervention, urology, and critical care units. 

Geographically, revenues from the company's US business were up approximately 14 percent to $2.81 billion from $2.46 billion a year ago, while revenues from international markets declined 10 percent to $2.20 billion from $2.45 billion in Q2 2021. 

In the quarter, the firm completed the spinout of its diabetes care business, now a standalone company called Embecta. The firm also completed the acquisition of cancer post-treatment monitoring firm Cytognos; launched BD Horizon RealYellow reagents for flow cytometry; and released the BD Rhapsody TCR/BCR Multiomic assay for autoimmune, immuno-oncology, and infectious disease applications. BD also announced the inaugural members of a scientific advisory board in the quarter. 

"The new BD Horizon RealYellow 586 Flow Cytometry reagents are the first in a series, and they have the potential to accelerate discovery and drug development by enabling greater insights from biological samples," Polen said.  

The firm's BD Cor Mx module along with an assay for chlamydia, gonorrhea, and trichomonas, are now under review by the US Food and Drug Administration, he said. "Already cleared outside of the US, clearance in the US will give BD access to the high-volume sexually transmitted infections testing market on a fully-automated and integrated platform," Polen said.  

BD's net income applicable to common shareholders for the quarter was $431 million, or $1.50 per share, compared to net income of $277 million, or $.94 per share, a year ago. Adjusted EPS for the recently completed quarter was $3.18, above the consensus Wall Street estimate of $2.99. 

BD's R&D expenses increased 8 percent to $343 million from $317 million in Q2 2021, and its SG&A costs increased 7 percent to $1.23 billion from $1.15 billion a year ago. 

BD finished the quarter with $3.15 billion in cash and cash equivalents, $173 million in restricted cash, and $15 million in short-term investments. 

The company raised its fiscal year 2022 guidance to revenues of $19.6 billion to $19.8 billion from a previously announced range of $19.55 billion to $19.75 billion. Revenue guidance assumes $450 million in COVID-19-only diagnostic testing revenues. The company now expects adjusted diluted EPS of between $12.85 and $13.00, compared to $12.80 to $13.00 previously. 

In Thursday morning trading on the Nasdaq, shares of BD were up approximately 1 percent at $255.69.