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BD Medical Segment Posted Strong Fiscal 1Q18 Performance

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Overview

In fiscal 1Q18, Becton, Dickinson and Company (BDX) (or BD) registered sales of ~$3.1 billion. Approximately 66% of these revenues are generated from the company’s BD Medical segment and came in at ~$2.0 billion, which represents YoY (year-over-year) sales growth of ~3.6%.

The BD Medical segment consists of four divisions—MPS (Medication and Procedural Solutions), MMS (Medication Management Solutions), Diabetes Care, and Pharmaceuticals Systems. The company reported YoY sales growth across all these divisions except Medication Management Solutions.

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The MMS segment was negatively impacted by the US Dispensing business changes, which we discussed previously in this series. Also, the ETFs such as iShares U.S. Medical Devices ETF (IHI) which holds portfolio exposure to BDX can have an impact on its stock prices. BD accounts for ~6.4% of IHI’s total portfolio holdings.

BD Medical segment reported currency neutral sales growth of ~1.9% in fiscal 1Q18, which included an impact of -1.7% due to the US Dispensing business model changes. The tough prior year comparison also negatively impacted the company’s BD Medical sales. Adjusting for these headwinds, the segment registered underlying sales growth of ~5.0% in fiscal 1Q18.

Factors that impacted BD Medical sales in fiscal 1Q18

In fiscal 1Q18, BD’s Medication and Procedural Solutions business registered sales growth of 5.0%. This growth was driven by the continued strength of its product portfolio, which consists of pre-filled flush devices, as well as surgical and infection prevention products. Continued growth in demand for pen needles drove BD’s Diabetes Care division’s sales growth of 2.2%.

The Pharmaceutical Systems business registered sales growth of 3.7%. However, the growth in these two segments had tough prior year comparisons from 7.2% and 15.5% sales growth registered in fiscal 1Q17, respectively, in these two divisions, driven by the timing of customer orders.

In the next article, we’ll look at the performance of BD Lifesciences in fiscal 1Q18.

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