BD Announces Results for Q3FY2018; Raises Fiscal 2018 Revenue Guidance

BD (Becton, Dickinson and Company), a leading global medical technology company, today reported quarterly revenues of USD 4.278 billion for the third fiscal quarter ended June 30, 2018.  This represents an increase of 41.0 percent from the prior-year period, which is primarily due to the acquisition of C. R. Bard.  On a comparable, currency-neutral basis that includes the revenues of C.R. Bard in the current and prior year, revenues increased 5.5 percent over the prior-year period. “Our strong revenue growth and operating performance this quarter demonstrate that we are delivering on our strategy,” said Vincent A. Forlenza, Chairman and CEO.  “We are on track with the integration of C. R. Bard and continue to deliver on our financial commitments while providing innovative solutions for our customers and their patients worldwide.”

Third quarter and nine-month fiscal 2018 operating results

As reported, diluted earnings per share for the third quarter were USD 2.03, compared with USD 0.75 in the prior-year period.  This represents an increase of 370.7 percent and is primarily due to a non-cash charge in the prior year related to the previously announced change in the US dispensing business model.  Adjusted diluted earnings per share were USD 2.91, compared with USD 2.46 in the prior-year period.  This represents an increase in adjusted diluted earnings per share of 18.3 percent, or 11.0 percent on a currency-neutral basis. For the nine-month period ended June 30, 2018, as reported, diluted earnings per share were USD 1.27, compared with USD 3.36 in the prior-year period.  This represents a decrease of 62.2 percent and is primarily due to purchase accounting expenses relating to acquisitions and additional tax expense relating to new US tax legislation, as well as the aforementioned non-cash charge in the prior year related to the change in the US dispensing model.  Adjusted diluted earnings per share were USD 8.08, compared with USD 7.09 in the prior-year period.  This represents an increase in adjusted diluted earnings per share of 14.0 percent, or 8.0 percent on a currency-neutral basis.

Segment results

In the BD Medical segment, as reported, worldwide revenues for the quarter of USD 2.246 billion increased 20.0 percent from the prior-year period, primarily due to the acquisition of C. R. Bard.  On a comparable, currency-neutral basis, BD Medical revenues increased 5.7 percent over the prior-year period.  The segment’s results were driven by strong performance in the Medication Delivery Solutions and Medication Management Solutions units. For the nine-month period ended June 30, 2018, BD Medical revenues were USD 6.270 billion as reported, an increase of 14.5 percent from the prior-year period.  On a comparable, currency-neutral basis, BD Medical revenues of USD 6.480 billion increased 4.1 percent over the prior-year period, which includes an estimated 110 basis point adverse impact from the previously disclosed change in the US dispensing business model.

In the BD Life Sciences segment, as reported, worldwide revenues for the quarter were USD 1.079 billion, an increase of 8.2 percent over the prior-year period, or 5.6 percent on a currency-neutral basis.  Revenue growth reflects strong performance across the Preanalytical Systems, Diagnostic Systems and Biosciences units. For the nine-month period ended June 30, 2018, BD Life Sciences revenues were USD 3.222 billion as reported, an increase of 9.7 percent from the prior-year period, or an increase of 6.7 percent on a currency-neutral basis.

In the BD Interventional segment, as reported, worldwide revenues for the quarter were USD 0.954 billion.  On a comparable, currency-neutral basis, revenues increased 5.1 percent over the prior-year period.  The segment’s results reflect strong performance in the Peripheral Intervention and Urology and Critical Care units. For the nine-month period ended June 30, 2018, BD Interventional revenues were USD 2.089 billion as reported.  On a comparable, currency-neutral basis, BD Interventional revenues of USD 2.826 billion increased 4.9 percent.

Geographic results

As reported, third quarter revenues in the US of USD 2.338 billion increased 45.9 percent from the prior-year period, primarily due to the acquisition of C. R. Bard.  On a comparable basis, US revenues increased 5.9 percent over the prior-year period.  Growth in the US was driven by strong performance across the BD Medical and BD Life Sciences segments, and in the Peripheral Intervention and Urology and Critical Care units within the BD Interventional segment.

As reported, revenues outside of the US of USD 1.941 billion increased 35.4 percent from the prior-year period, primarily due to the acquisition of C. R. Bard.  On a comparable, currency-neutral basis, revenues outside of the US increased 5.1 percent over the prior-year period.  International revenue growth was driven by strong performance across the BD Life Sciences segment, as well as in the Medication Delivery Solutions and Medication Management Solutions units within the BD Medical segment, and the Surgery and Peripheral Intervention units in the BD Interventional segment.

For the nine-month period ended June 30, 2018, US revenues were USD 6.319 billion as reported, an increase of 30.0 percent over the prior-year period.  On a comparable basis, US revenues of USD 6.916 billion increased 3.7 percent over the prior-year period, including an estimated 140 basis point adverse impact from the change in the US dispensing business model.  As reported, revenues outside of the US of USD 5.261 billion increased 29.3 percent over the prior-year period.  On a comparable, currency-neutral basis, revenues outside the US of USD 5.611 billion increased 6.6 percent over the prior-year period.

Fiscal 2018 outlook for full year

The company is raising its full fiscal year 2018 revenue guidance and now expects growth to exceed 31.5 percent on a reported basis, compared to previous guidance of approximately 31.0 to 31.5 percent growth.  On a comparable, currency-neutral basis, the company is also raising its revenue guidance and now expects growth to exceed 5.5 percent, compared to previous guidance of 5.0 to 5.5 percent growth.  Comparable revenue guidance continues to include an estimated 50 basis point adverse impact from the change in the US dispensing business model and the estimated sales impact from Hurricane Maria in Puerto Rico on Bard’s business during BD’s first fiscal quarter.

The company is narrowing its full fiscal year 2018 adjusted diluted earnings per share guidance to a range of USD 10.95 to USD 11.05, from a range of USD 10.90 to USD 11.05 previously. This represents growth of approximately 15.5 to 16.5 percent over fiscal 2017 adjusted diluted earnings per share, and reflects the company’s increased revenue outlook as well as a small decrease in the expected benefit from foreign currency.  On a currency-neutral basis, the company continues to expect full fiscal year adjusted diluted earnings per share growth of approximately 12.0 percent.

Estimated adjusted diluted earnings per share for fiscal 2018 excludes potential charges or gains that may be recorded during the fiscal year, such as, among other things, the non-cash amortization of intangible assets, acquisition-related charges, and certain tax and litigation matters.  BD does not attempt to provide reconciliations of forward-looking non-GAAP earnings guidance to the comparable GAAP measure because the impact and timing of these potential charges or gains is inherently uncertain and difficult to predict and is unavailable without unreasonable efforts.  In addition, the company believes such reconciliations would imply a degree of precision and certainty that could be confusing to investors.  Such items could have a substantial impact on GAAP measures of BD’s financial performance. – Medical Buyer Bureau