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Beckton Dickinson: Key Highlights of 3Q17 Results

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Earnings per share

Becton Dickinson (or BD) (BDX), one of the largest medical device companies in the United States, reported its 3Q17 earnings on August 3, 2017. Its adjusted diluted EPS (earnings per share) came in at $2.46. That represents a rise of 7.7% YoY (year-over-year).

EPS of $2.46 exceeded Wall Street analysts’ estimate of $2.44. The company’s Respiratory Solutions business divestiture as well as the business model changes in its US dispensing business negatively impacted 600 basis points of EPS growth. However, its year-to-date EPS registered solid growth of 13.1%.

For more details on the business model changes in the BD’s US dispensing business, read Understanding BD’s Business Model Changes in Dispensing. We’ll look at the progress of this initiative in another part of this series.

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Revenue performance

In 3Q17, BD reported revenues of approximately $3.0 billion, which represented a YoY fall of around 5.1%. The major factor that contributed to the fall was the continued negative impact of the divestiture of the Respiratory Solutions business, which was completed in October 2016. However, the comparable constant currency sales growth for the company came in at ~2.4%.

Revenues for 1Q17 were below Wall Street analysts’ estimate of $20.0 million, as you can see in the above graph. Revenues were also below the company’s expectations. The results in the quarter continued to be impacted by pricing headwinds. The US dispensing business model changes had a 100 basis point negative impact on revenues for 3Q17.

In comparison, peers Abbott Laboratories (ABT), Thermo Fisher Scientific (TMO), and Medtronic (MDT) reported revenues of ~$6.6 billion, ~$5.0 billion, and ~$7.4 billion, respectively, in their recently ended quarters.

Investors seeking diversified exposure to BD can invest in the Vanguard S&P 500 ETF (VOO). BD accounts for ~0.21% of VOO’s total holdings.

Next, we’ll take a look at BD’s US dispensing model changes and the impact on the company’s revenues.

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