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BD Reports 5 Percent Q4 Revenue Growth; Reorganizes into Two Business Segments

NEW YORK (GenomeWeb) — Becton Dickinson today reported fiscal fourth quarter revenue growth of 5 percent driven primarily by its Medical and Diagnostics segments.

For the three months ended Sept. 30, BD reported revenues of $2.2 billion compared to $2.1 billion in the same quarter last year, and ahead of the average analyst estimate of $2.16 billion.

By segment, BD Medical revenues increased nearly 7 percent to $1.19 billion, or 6 percent on a currency-neutral basis; BD Diagnostics grew 4 percent on both a reported and currency-neutral basis to $708 million; and BD Biosciences sales were flat year over year on both a reported and currency-neutral basis at $301 million.

During a conference call recapping the company's fiscal Q4 and full-year earnings, CFO Christopher Reidy noted that growth in the Diagnostics segment was driven by "solid sales of pre-analytical systems, safety engineered products, and solid growth in diagnostic systems," the latter of which benefitted from strong sales in microbiology.

Flatness in the BD Biosciences segment, meantime, was impacted by an unfavorable comparison to the prior year, which had a particularly strong Q4 related to timing in Western Europe and Japan stimulus revenues.

Also during the call, company executives noted that as of October, BD is reorganizing into a two-segment structure consisting of a Medical and Life Sciences segment. The BD Medical segment is now composed of the medical/surgical systems, pharmaceutical systems, and diabetes care units, while the Life Sciences segment comprises the pre-analytical systems, diagnostic systems, and biosciences business units.

The new structure is "more reflective of the company's strategy and increased focus on growth as we develop more impactful solutions for our customers," CEO Vince Forlenza said during the call. The change will also enable the company "to seek strategic synergies across our portfolio," Forlenza said.

For fiscal Q4, BD reported net income of $301 million, or $1.53 per share, compared to net income of $91 million, or $.46 per share, in the year-ago period.

On an adjusted basis, BD's EPS from continuing operations for fiscal Q4 was $1.68, beating the average analyst estimate of $1.65.

The company's R&D costs rose 6 percent to $140 million in fiscal Q4 from $133 million, while its SG&A expenses dropped 36 percent to $561 million from $877 million.

For full-year fiscal 2014, BD's revenues were up 5 percent to $8.45 billion from $8.05 billion, beating the consensus analysts' estimate of $8.41 billion.

Full-year 2014 revenues in the BD Medical segment increased 6 percent to $4.57 billion. Meantime, BD Diagnostics revenue increased nearly 3 percent to $2.71 billion, and BD Biosciences revenue jumped 5 percent to $1.16 billion.

For FY 2014, BD reported net income of $1.19 billion, or $5.99 per share, compared to $1.29 billion, or $6.49 per share, in fiscal 2013. Adjusted EPS from continuing operations, excluding the amortization of acquisition-related intangibles, was $6.50, ahead of the Wall Street estimate of $6.24.

BD's R&D costs rose 11 percent to $550 million in fiscal 2014 from $494 million in FY 2013, while its SG&A expenses dropped 11 percent to $2.14 billion from $2.42 billion.

For full-year fiscal 2015, the company estimated that revenues will grow in the 4.5 percent to 5 percent range on a currency-neutral basis. On a reported basis, revenues are expected to increase 2 percent to 2.5 percent due to an unfavorable foreign currency impact.

It said that EPS from continuing operations are estimated to be between $6.47 and $6.54 for fiscal 2015, while adjusted EPS is expected to between $6.76 and $6.83.

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