Becton, Dickinson and Company (BDX) is slated to report second-quarter fiscal 2011 results on Tuesday, April 26, at the close of business. The current Zacks Consensus Estimate for the quarter is $1.30, representing an estimated year-over-year increase of 4.74%.
During an earlier announcement, the company had guided both reported and adjusted earnings per share from continuing operations for fiscal 2011 to grow about 10% to 12% to a range of $5.45 to $5.55. At the same time, Becton, Dickinson added that it expects fiscal 2011 revenues to increase about 4% year over year.
First-Quarter Recap
Becton, Dickinson reported first-quarter fiscal 2011 earnings of $1.35 per share, beating the Zacks Consensus Estimate of $1.29. Total revenues decreased 1.4% year over year (1.5% in constant currency) to $1.84 billion and missed the Zacks Consensus Estimate of $1.89 billion.
Domestic sales for the quarter amounted to $829 million, down 2.9% year over year, including a negative impact of 6% from the flu pandemic in the preceding year. Overseas revenues were $1.01 billion, down 0.2% (or 0.3% in constant currency), including a negative impact of 3% from the flu pandemic. Becton, Dickinson experienced higher growth in emerging markets, offset by a slowdown in European markets.
Estimate Revision Trend
Agreement
The overall trend in estimate revisions for the upcoming quarter is relatively static. Of the 16 analysts covering the stock, there were no upward or downward revisions during the past 7 days. Only one analyst has raised his/her estimate in the past month while none lowered their forecast.
With regard to fiscal 2011, only 1 analyst (out of 17) lifted his/her estimate over the last week with no reverse movements. Over the past month, three analysts raised their estimates while none moved in the opposite direction. The current Zacks Consensus Estimate for fiscal 2011 is $5.51, reflecting an estimated 12.51% year-over-year growth.
Magnitude
Given the relative lack of estimate revisions, the magnitude of revisions for the forthcoming quarter and fiscal year has hit a plateau, for both the past 7 and 30 days.
Becton, Dickinson has reported positive earnings surprises in three of the previous four quarters. The company produced an average positive earnings surprise of 1.97% over the prior four quarters, meaning that it beat the Zacks Consensus Estimate by that measure.
Our Take on Becton, Dickinson
Becton, Dickinson, a leading global medical technology company, produces and markets medical devices, instrument systems and reagents. The company is dedicated to enhancing drug delivery, improving the pace of diagnosing infectious diseases and cancer and advancing R&D for new drugs.
We remain cautious about Becton, Dickinsondue to the lack of major short-term catalysts. The rising demand for safety-needle products (with higher price points and margins) was the primary driver of the company’s past growth, which is not expected to continue, given that the U.S. market is already predominantly penetrated. Further, Becton, Dickinson faces a wide range of competitors in each of its three business segments.
We are, however, hopeful that growth may recover in the future with the European Union adoption of safety requirements, recovery in research markets and continued growth in flow cytometry in the clinical setting. Becton, Dickinson’spreeminent global health care products franchise is partly insulated from volatile macroeconomic conditions and structural deficiencies elsewhere in the health care delivery field.
The company competes, in niches, with different companies such as Baxter International (BAX) among others. We currently have a long-term Neutral recommendation on the stock, which is supported by a short-term Zacks #3 Rank (Hold).
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