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Becton Dickinson Fiscal Q2 Revenues Down 1 Percent

NEW YORK (GenomeWeb) – Becton Dickinson reported today that its fiscal second quarter revenues decreased approximately 1 percent year over year.

On a comparable, currency-neutral basis, Q2 revenues increased more than 3 percent, BD said.

For the three months ended March 31, BD posted revenues of $4.20 billion compared to $4.22 billion in the year-ago quarter and below the analysts' average estimate of $4.24 billion.

BD's Medical segment revenues were up less than 1 percent to $2.18 billion from $2.17 billion a year ago. 

BD Life Sciences revenues decreased 4 percent to $1.05 billion from $1.10 billion in the prior-year quarter. Within the segment, preanalytical systems revenues decreased 4 percent to $366 million from $381 million, while diagnostic systems revenues fell 5 percent to $389 million from $410 million, and biosciences revenues were down 3 percent to $297 million from $307 million. 

On a comparable, currency-neutral basis, Life Sciences revenues grew nearly 3 percent, driven by performance in biosciences and preanalytical systems, with growth in diagnostic systems reflecting a tough-to-compare flu season in the prior-year period, the firm said.

BD Interventional revenues grew 1 percent to $963 million from $952 million.

In a call to discuss the financial results, Vincent Forlenza, BD's chairman and CEO, also noted that revenues in the quarter had been affected by a headwind to the firm's drug-coated balloon (DCB) business, which was impacted by market reaction to a letter to healthcare providers from the US Food and Drug Administration regarding a potential for increased long-term mortality due to the use of paclitaxel-coated balloons and stents. The FDA will now convene an advisory committee meeting of the Circulatory System Devices Panel in June.

Geographically, revenues from the company's US business were up approximately 1 percent to $2.34 billion from $2.33 billion a year ago, while revenues from international markets decreased about 2 percent to $1.85 billion from $1.90 billion in Q2 2018.

Growth in the US was driven by performance in the BD Medical, which was up about 3 percent, and BD Interventional, which rose 2 percent, while BD Life Sciences revenues  retreated about 6 percent, reflecting the tough year-ago flu comparison.

Internationally, revenues increased about 5 percent on a comparable, currency-neutral basis reflecting strong performance in China, Europe, the Middle East, and Africa, Franklin Lakes, New Jersey-based BD said.

BD's net loss applicable to its common shareholders for the quarter was $18 million, or $.07 per share, compared to a net loss of $50 million, or $.19 per share, a year ago. Adjusted EPS for the recently completed quarter was $2.59, just above the consensus Wall Street estimate of $2.58.

BD's R&D expenses decreased 3 percent to $252 million from $259 million for Q2 2018, and its SG&A costs increased 3 percent to $1.09 billion from $1.06 billion. On the conference call, the firm attributed the increase to a difference in fiscal year end compensation schedules between BD and Bard.

BD finished the quarter with $686 million in cash and cash equivalents, and $81 million in restricted cash. 

The company reaffirmed its full fiscal year 2019 comparable, currency-neutral revenue guidance, and updated its adjusted diluted earnings per share guidance.

BD now expects full fiscal year 2019 revenues to increase 8 to 9 percent, compared to 8.5 to 9.5 percent previously communicated, due to an estimated additional negative impact from foreign currency, but the firm continues to estimate full fiscal year 2019 revenues will increase 5 to 6 percent on a comparable, currency-neutral basis.

The company expects adjusted diluted earnings per share to be between $11.65 and $11.75, representing growth of approximately 6 percent to 7 percent on a reported basis. On a currency-neutral basis, growth would be 12 percent, a decrease from previously issued guidance of approximately 13 to 14 percent growth. BD said this is due to recent regulatory and market pressures related to paclitaxel-coated devices. 

"Our updated EPS guidance reflects strong underlying performance, partially offset by the headwind to our DCB business, as well as additional foreign currency pressure due to broad strengthening of the US dollar," Forlenza said in the call.

BD shares were down approximately 4 percent to $223.87 in morning trading on the New York Stock Exchange.