BD Life Sciences Sales Hit by Weak Diagnostics Segment



BD Life Sciences sales

Becton Dickinson (or BD) (BDX) reported ~$3 billion of revenues worldwide in 1Q16. Of that, ~$0.93 billion was generated through BD’s Life Sciences segment, which contributed ~31% to BD’s total revenues. These sales figures represent about a 4.8% YoY (year-over-year) decline in 1Q16 on an operational basis.

On a comparable basis, the adjusted segment revenues grew by approximately 1.7%. Preanalytical and biosciences systems divisions reported a strong growth in sales. The diagnostics segment witnessed a marginal decline of ~0.8%, largely attributable to a light flu season.

BD Life Sciences Segment

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Segmental growth drivers

In 1Q16, BD’s growth in its preanalytical and biosciences segment drove BD Life Sciences segment sales. Safety-engineered products, which form part of the preanalytical systems division under the BD Life Sciences segment, was one of the main drivers of BD’s international sales. It was acquired through the acquisition of CareFusion in March 2015.

The products from these segments registered strong growth in the United States. BD Biosciences registered a growth of 1.2% compared to 2.2% in the last quarter. This was due primarily to tough prior year comparisons and tough emerging market conditions.

BD Diagnostics registered a sales decline of ~0.8% in 1Q16 against growth of 5.9% in the last quarter. The microbiology and molecular diagnostics sales led by BD Max witnessed strong growth. It had a significantly negative impact of around 4% due to the mild flu season in the quarter and a capital spending slowdown in China.

Some of the major players in the US medical device industry include Boston Scientific (BSX), Abbott Laboratories (ABT), and Baxter (BAX), which are expected to report 1Q16 YoY sales growth of 8.2%, -2.6%, and -37.5, respectively. Investors can invest in the Health Care Select Sector SPDR ETF (XLV), which has about a 1.2% exposure to BD.


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