Becton, Dickinson and Company (BDX) reported first quarter fiscal 2010 earnings per share of $1.30, surpassing the Zacks Consensus Estimate of $1.20 and the year-ago earnings of $1.25.
Total Revenues
Total revenues in the first quarter increased 12% year over year to $1.917 billion. Excluding the foreign currency translation (FX), total revenues increased 9% year over year. Growth was registered across all major business segments.
BD Medical revenues increased 16% year over year to $1.019 billion. Growth can be attributed to higher sales of Medical Surgical, Pharmaceutical Systems and Diabetes Care products.
BD Diagnostics revenues increased 10% year over year to $595 million. Growth was primarily due to higher demand for the company’s safety-engineered devices and infectious disease testing systems.
BD Biosciences revenues were approximately flat year over year at $303 million. Becton’s capital funding constraints negatively impacted sales of clinical and research instruments in this business category.
Becton derived the bulk of its revenues from international operations. International revenues were roughly 54.5% of total revenues and increased 13% year over year. Domestic revenues increased 10% year over year.
Margins
Gross margin declined 160 basis points (bps) year over year to 52.0% in the reported quarter due to the higher cost of goods sold. Selling and administrative expenses as a percentage of sales declined 10 bps year over year to 23.5%. Research and development expenses as a percentage of sales declined 50 bps year over year to 5.2%. Lower gross margin was responsible for a lower operating margin that declined 100 bps year over year to 23.3%.
Outlook
Becton has raised its sales and earnings per share guidance for full fiscal 2010. For the year, Becton now expects revenues to increase roughly 7% year over year, compared to the previous guidance of 6%. Earnings per share should increase approximately 2%−4% year over year to $5.05−$5.15. Becton’s previous guidance was an increase of 1%−3% year over year in earnings per share.
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’s primary competitors are Baxter International Inc. (BAX), Johnson & Johnson (JNJ) and Abbott Laboratories (ABT).
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