Back to top

Image: Bigstock

Can BD Medical Drive Becton, Dickinson's (BDX) Q4 Earnings?

Read MoreHide Full Article

Becton, Dickinson and Company’s (BDX - Free Report) , popularly known as BD, fourth-quarter fiscal 2018 results are scheduled to release on Nov 6, before market opens. While the results are likely to show steady growth in the core BD Medical segment, BD Life Sciences may also drive quarterly results.

Fiscal Q3 Results at a Glance

In the third quarter of fiscal 2018, BD posted adjusted earnings per share of $2.91, which beat the Zacks Consensus Estimate of $2.85. Earnings improved 18.3% on a year-over-year basis and 11% at constant currency (cc).

In the last reported quarter, the company raked in revenues of $4.28 billion, surpassing the Zacks Consensus Estimate of $4.24 billion. Revenues surged 41% from the year-ago quarter and 5.5% at cc.

BD has an average positive earnings surprise of 2% for the trailing four quarters.

Which Way Are Estimates Treading?

For the quarter to be reported, the Zacks Consensus Estimate for BD’s earnings per share is pegged at $2.92, showing a year-over-year increase of 21.7%. The same for revenues stands at $4.36 billion, reflecting an increase of 37.7% year over year.

Let’s see how things are shaping up prior to the earnings release.

BD Medical to Drive Q4 Earnings

BD Medical is one of the major revenue drivers of the company. The segment’s product lines include needles, syringes and intravenous catheters for medication delivery, prefilled IV flush syringes, syringes and pen needles for diabetes care and others.

In the last reported quarter, BD Medical accounted for 52.6% of the company’s net revenues. The segment recorded worldwide revenues of $2.25 billion, up 20% from the year-ago quarter and 5.7% at cc.

It is encouraging to note that, for the fiscal fourth quarter, the Zacks Consensus Estimate for the segment’s revenues is pegged at $2.31 billion, showing a year-over-year rise of 9.1%.

Coming to the subsegments, Medication Surgical Systems revenues grew 39.2% in the third quarter. The Zacks Consensus Estimate for fourth-quarter revenues is pegged at $983 million, up 10% on a year-over-year basis.

Revenues at Medication Management Solutions rose 9.7% in the last reported quarter. The Zacks Consensus Estimate for fourth-quarter sales is pinned at $633 million, up 10.9% year over year. Earlier this year, BD collaborated with Indiana-based Helmer Scientific to introduce a refrigerated solution using its new Pyxis ES refrigerator. (Read more: Becton, Dickinson Ties Up With Helmer Scientific to Boost MMS)

Diabetes Care revenues grew 5% in the third quarter. The Zacks Consensus Estimate for the fourth quarter stands at $295 million, showing a rise of 4.2% from a year ago.

At Pharmaceutical Systems, revenues grew 9.4% in the third quarter. The Zacks Consensus Estimate for the fourth quarter is pinned at $401 million, up 9.3% on a year-over-year basis.

Other Factors at Play

Core BD Life Sciences unit is also likely to put up a strong show in the quarter to be reported. The segment provides products for the safe collection and transport of diagnostics specimens and also produces research and clinical tools that facilitate the study of cells.

In the last reported quarter, the segment contributed 25.5% to BD’s net sales. For the quarter to be reported, the Zacks Consensus Estimate for the segment’s sales stands at $1.1 billion, showing a year-over-year increase of 4.7%.

For investors’ notice, BD expects fiscal 2018 sales to exceed 31.5% on a reported basis, compared to the previous guidance of 31-31.5% growth. At cc, the company expects revenues to exceed 5.5% compared to the previous guidance of 5-5.5% growth. The Zacks Consensus Estimate is pegged at $15.95 billion.

Fiscal adjusted earnings per share are estimated in the range of $10.95 to $11.05. This represents growth of approximately 15.5-16.5% over fiscal 2017. Meanwhile, the Zacks Consensus Estimate is pinned at $11.01, within the guided range.

What Does Our Model Say?

Per our proven model, a stock needs to have a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to deliver a positive earnings surprise in the quarter. This is precisely the case here.

Earnings ESP: BD has an Earnings ESP of +0.43%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: BD carries a Zacks Rank #3.

Please note that we caution against stocks with a Zacks Rank #4 (Sell) or 5 (Strong Sell) going into the earnings announcement, especially when the company is seeing negative estimate revision.

Other Stocks Worth a Look

Here are a few other medical stocks worth considering as they also have the right combination of elements to post an earnings beat this quarter.

PerkinElmer has an Earnings ESP of +1.45% and a Zacks Rank #3.

Quidel Corporation (QDEL - Free Report) has an Earnings ESP of +10.55% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

athenahealth has an Earnings ESP of +17.15% and a Zacks Rank #3.

More Stock News: This Is Bigger than the iPhone!

It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.

Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.

Click here for the 6 trades >>


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


Becton, Dickinson and Company (BDX) - free report >>

QuidelOrtho Corporation (QDEL) - free report >>

Published in