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Becton Dickinson Q4 Revenues Down 2 Percent

This article has been updated from a previous version to include comments from Becton Dickinson's earnings call.

NEW YORK (GenomeWeb) – Becton Dickinson reported today that its fiscal fourth quarter revenues fell 2 percent year over year, driven by divesture of it's of the respiratory solutions business. 

For the three months ended Sept. 30, the company posted revenues of $3.17 billion compared to $3.23 billion in the year-ago quarter, beating Wall Street analysts' average estimate of $3.15 billion.

BD's Medical segment brought in $2.12 billion, a 5 percent increase over the $2.24 billion reported a year ago. BD Life Sciences recorded $1.05 billion in revenues, up 6 percent from $996 million in Q4 2016. Within the segment, preanalytical systems revenues were up 5 percent at $378 million from $359.0 million, while diagnostic systems revenues were up around 5 percent to $359 million from $342 million, and biosciences revenues increased 6 percent to $314 million from $296 million.

Specifically, Christopher Reidy, BD's executive vice president and CFO noted on a call following the release of the company's financial results that the diagnostics systems segment's strength in core microbiology was driven by blood culture and ID-AST, as well as continued strong growth in the firm's BD Max molecular platform.

Revenues from the company's US business fell 6 percent to $1.64 billion from $1.75 billion a year ago, while revenues from international markets were up almost 3 percent at $1.52 billion from $1.48 billion in Q4 2016.

BD's net income for the quarter applicable to its common shareholders rose to $289 million, or $1.24 per share, from $19 million, or $0.09 per share, a year ago. On an adjusted basis, the company reported Q4 EPS of $2.40 compared to $2.12 in the prior-year period, and beat the consensus Wall Street estimate of $2.37 per share.

BD's R&D expenses fell nearly 13 percent year over year to $221 million from $253 million, and SG&A costs decreased 3 percent to $774 million from $796 million.

The company continues to work toward closing the acquisition of C.R. Bard, a medical technology firm manufacturing vascular, urology, oncology, and surgical specialty products, and stated the process is on track with an expected closing date in the fourth calendar quarter of 2017.

For the full fiscal year that ended on Sept. 30, BD reported revenues of $12.09 billion, down 3 percent from $12.48 billion in 2016, due to the divesture of the respiratory solutions business. On a comparable, currency-neutral basis, 2017 adjusted revenues grew about 4 percent.

BD Medical revenues were down 6 percent year over year to $8.11 billion from $8.65 billion, while BD Life Sciences revenues grew 4 percent to $3.99 billion from $3.83 billion.

The firm overcame multiple headwinds in the year, Vincent Forlenza, BD's chairman and CEO, said on the call. These included the impact from the transformation of the firm's US dispensing business model, lost earnings from the respiratory business divestiture, continued currency pressure, and impact from the hurricane season.

Becton Dickinson has three plants in Puerto Rico that were affected by Hurricane Maria and current fiscal 2018 revenue and EPS guidance does not consider any potential impact due to the hurricane. "We are still evaluating the impact and estimate it could be as much as $40 million to revenues, with a corresponding impact that could be as much as 1 percentage point of EPS growth," Reidy said, noting that the products manufactured in BD's three plants in Puerto Rico represent approximately 5 to 6 percent of total company revenues. 

The firm also recently expanded its genomics business through the launch of BD Rhapsody, a single-cell platform for RNA expression analysis previously in limited release as BD Resolve. Additionally, BD completed a small tuck-in acquisition of a provider of informatics software, Forenza said, that "enables BD to offer full sample-to-discovery flow cytometry and single cell genomics solutions." The firm also formed partnerships with FlowJo Envoy and Cytapex Bioinformatics in the year.

For 2017, BD's net income applicable to common shareholders rose to $1.03 billion, or $4.60 per share, from $976 million, or $4.49 per share, in 2016. The firm reported adjusted full-year earnings per share of $9.48, slightly above the consensus Wall Street estimate of $9.46.

BD's R&D expenses for 2017 fell 7 percent year over year to $774 million from $828 million, and SG&A costs were trimmed about 2 percent to $2.93 billion from $3.0 billion in 2016.

The firm expects 2018 revenues to increase 5 to 6 percent, or 4 to 5 percent on a comparable, currency-neutral basis.

In 2018, the firm expects that EPS will be between $10.55 and $10.65, which would represent growth of around 12 percent, and that adjusted diluted earnings per share will grow around 10 percent.

In Thursday morning trade on the New York Stock Exchange, shares of BD were up 15 percent at $223.40.