Becton, Dickinson and Company (BDX) recently started expanding the recall of its catheters as a result of a manufacturing problem that could cause fatal embolisms or blood leakage. Becton is recalling its defective Q-Syte Luer Access Devices and Nexiva Closed IV Catheter Systems. The company started the initial recall of these products on Oct 28, 2009.
Becton is in constant touch with the U.S. Food and Drug Administration (FDA) and worldwide health agencies to coordinate the recall. The Nexiva products have two Q-Syte devices within the package that could be affected. The Q-Syte devices are used with intravenous systems.
Becton has already recalled roughly 2.8 million Q-Syte and 2.9 million Nexiva units containing 5 million Q-Syte devices. Becton, Dickinson has identified the root cause of the manufacturing problem and has corrected it, according to the company.
We think that the product recall will have a minimal impact on Becton, Dickinson’s bottom-line. The company recently reported strong first quarter fiscal 2010 results. Earnings per share of $1.30 easily beat the Zacks Consensus Estimate of $1.20 and the year-ago earnings of $1.26. Becton also reported an expansion in its top-line with growth across all major business segments.
Becton, Dickinson and Company develops, manufactures and markets medical devices, supplies, laboratory equipment and diagnostic products globally. The company is a world leader in safety needle products. Becton competes with players like Baxter International Inc. (BAX), Johnson & Johnson (JNJ) and Abbott Laboratories (ABT).
Presently, we have a Neutral recommendation on Becton.
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