Morningstar | Becton, Dickinson Delivers In Line 1Q Results
Becton, Dickinson reported in line first-quarter results, with revenue up 5.2% on a currency-neutral basis and earnings up 15% mainly a result of favorable tax timing. We're planning to raise our fair value estimate to account for cash flows realized since our last update; the shares are fairly valued at current levels. Our narrow-moat rating is unchanged.Performance in the medical segment was mixed, with medication management solutions and pharmaceutical businesses' strength offset by fairly weak diabetes and delivery solutions units. MMS grew 6.7% in the quarter; infusion, once again, led growth in this business with capital spending environment remaining rather attractive in the U.S. Pyxis continues to gain share in dispension. Weaknesses in diabetes and MDS weren't structural but rather timing/comps related. The life sciences segment was negatively affected by strong flu in 2018, which we anticipated. The interventional business highlights include in-line drug-coated balloon sales, but we anticipate the effect of the paclitaxel study released in December hasn't been fully digested by the market. Several trials reported suspension of recruitment efforts for DCBs and while the FDA came out in support of DCBs in PAD, we suspect the next quarter will give us better vantage point on the impact of the study on the Lutonix franchise.
By geography, we were a bit surprised by the relative weak performance in the emerging markets, up only 7.8% organically in the quarter, despite China still growing strongly (13.3%). The company pointed to revenue timing and noted strong order backlog. BD reaffirmed its full-year guidance, implying a bounceback in emerging markets and medical. Raw materials (resin in particular) will provide a headwind on the earnings line. Bard synergies expectations are intact.
Becton, Dickinson and Company is a medical technology company engaged in the development, manufacture and sale of a range of medical supplies, devices, laboratory equipment and diagnostic products. The company's segments are: BD Medical, which produces an array of medical technologies and devices that are used to help improve healthcare delivery in a range of settings; BD Life Sciences, which provides products for the safe collection and transport of diagnostics specimens, and instruments and reagent systems to detect a range of infectious diseases, healthcare-associated infections and cancers; and BD Interventional, which provides vascular, urology, oncology and surgical products.
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