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Becton Dickinson Fiscal Q2 Revenues Up 1 Percent

NEW YORK – Becton Dickinson reported on Thursday morning that its fiscal second quarter revenues increased just over 1 percent year over year.

On a currency-neutral basis, Q2 revenues increased more than 2 percent, BD said.

For the three months ended March 31, BD posted revenues of $4.25 billion compared to $4.20 billion in the year-ago quarter and below the average analyst estimate of $4.16 billion.

The firm's second quarter results were slightly ahead of its prior expectations, but it is seeing a negative impact of the coronavirus pandemic on certain parts of its business, CEO Tom Polen said in a statement. "We are confident that our diversified portfolio and the proactive actions we are taking will help us navigate these current challenges while positioning BD well as we continue to advance our long-term growth strategy," he said.

In a call to recap the earnings, Polen specified that the financial headwinds are coming in part from a decline in elective and non-urgent hospital procedures. In diagnostics, BD is also seeing the deferral of routine care having a "significant negative impact on diagnostic testing overall, which of course leads to temporarily lower use of sample collection devices," Polen said.

Chris Reidy, BD's chief financial officer, also said that research lab closures have impacted demand for the firm's bioscience reagents and research instruments. For the month of April, Reidy said the firm saw a $40 million revenue decline in diagnostics and a $20 million decline in bioscience revenues relative to pre-COVID expected revenues for the month. Accross the firm's portfolio, Reidy estimated that COVID-19 had a negative impact of approximately $240 million in the month of April, partially offset by an increased demand for Alaris pumps in April that Reidy said BD does not expect to continue.  

BD's medical segment revenues were down 1 percent to $2.15 billion from $2.18 billion a year ago, reflecting strong growth in the pharmaceutical systems and diabetes care units that was offset by declines in the medication management solutions and medication delivery solutions units.

BD life sciences revenues increased 6 percent to $1.11 billion from $1.05 billion in the prior-year quarter. Within the segment, preanalytical systems revenues increased 9 percent to $400 million from $366 million, while diagnostic systems revenues rose 12 percent to $434 million from $389 million, and biosciences revenues were down 6 percent to $280 million from $297 million.

On a currency-neutral basis, life sciences revenues grew nearly 7 percent, driven by performance in the diagnostic systems and preanalytical systems units. In particular, the firm said growth was aided by flu-related revenues in the diagnostic systems unit as a result of a stronger flu season in comparison to the prior year, as well as by demand related to COVID-19 testing. The segment's results also reflect a tough comparison to the prior year in the biosciences unit, driven by the timing of licensing revenues, and reflect reduced demand for instruments and reagents as research lab activity slowed significantly during the COVID-19 pandemic, BD said.

BD Interventional revenues grew 1 percent to $990 million from $963 million, driven by solid performance in the peripheral intervention and urology and critical care units.

Geographically, revenues from the company's US business were up approximately 3 percent to $2.42 billion from $2.34 billion a year ago, while revenues from international markets decreased about 1 percent to $1.84 billion from $1.85 billion in Q2 2019.

Growth in the US was driven by performance in the life sciences and interventional segments, which were up 11 and 5 percent, respectively, partially offset by a decline in the medical segment that was primarily driven by lower Alaris System sales.

Internationally, revenues increased about 2 percent on a currency-neutral basis, the firm said, driven by performance in Europe and Latin America that was offset by a decline in China.

In the quarter, the firm launched the ReadA digital plate reading system on the BD Kiestra automated microbiology platform in Europe and submitted a 510(k) filing with the US Food and Drug Administration.

The firm also completed the acquisition of NAT Diagnostics, a molecular point-of-care testing company, during the quarter. "This acquisition will ultimately extend the breadth of BD Solution offerings into molecular point-of-care testing," Polen said, adding that the firm plans to advance the system and launch it in the next few years.

BD's net income applicable to common shareholders for the quarter was $145 million, or $.53 per share, compared to a net loss of $18 million, or $.07 per share, a year ago. Adjusted EPS for the recently completed quarter was $2.55, above the consensus Wall Street estimate of $2.36.

BD's R&D expenses increased 5 percent to $264 million from $252 million in Q2 2019, and its SG&A costs decreased 6 percent to $1.03 billion from $1.09 billion a year ago.

BD finished the quarter with $2.35 billion in cash and cash equivalents, and $6 million in short-term investments.

The company withdrew its fiscal year 2020 revenue and EPS guidance due to ongoing uncertainty regarding the scope and duration of the COVID-19 pandemic, as well as the timing and pace of recovery.

In Thursday morning trading on the Nasdaq, shares of BD were up 2 percent to $261.52.