uploads///REVENUE GUIDANCE

The Impact of Dispensing Business Changes on BD’s Revenue

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Dec. 4 2020, Updated 10:53 a.m. ET

US dispensing business headwinds

BD (BDX) has introduced some changes to its US dispensing business as part of its efforts to transform its medication management solutions. The initiative has impacted the company’s performance due to related accounting changes. For details, read Headwind for Becton Dickinson: US Dispensing Business. These changes had a higher-than-expected impact in 3Q17 and 4Q17, and impacted the company’s revenue by 50 basis points in fiscal 2017.

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Revenue guidance for fiscal 2018

In fiscal 2018, BD expects to register currency-neutral sales growth of 4%–5%. Including positive currency effects of ~100 basis points, it is expected to witness sales growth of 5%–6%. US dispensing changes are expected to create a headwind of around 50 basis points in fiscal 2018, and impact YoY (year-over-year) sales growth by ~100 basis points in 1Q18 and 2Q18. These estimates represent the company’s standalone guidance and do not include the impact of the BD-Bard transaction, which is expected to close in 1Q18. Economic factors that may cause the guidance to fluctuate include a stronger or weaker flu season, emerging market growth, pricing pressure, and new product launches.

Segment-wise sales estimates

In 1Q18, both the BD Medical and BD Life Sciences businesses are expected to register sales growth of 4%–5%. New product launches and continued strength in emerging and developed markets are expected to be the major growth drivers. However, some pricing pressure is expected to impact the company’s performance in the quarter.

Peers Medtronic (MDT), Stryker (SYK), and Zimmer Biomet (ZBH) are expected to register sales growth of around -1.1%, 7.4%, and 0.6%, respectively, in their subsequent quarters. The Vanguard Total Stock Market ETF (VTI) has a ~0.19% exposure to BDX.

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