10-QPeriod: Q1 FY2009

BECTON DICKINSON & CO Quarterly Report for Q1 Ended Dec 31, 2008

Filed February 9, 2009For Securities:BDX

Summary

Becton Dickinson & Co. (BDX) reported solid financial results for the first quarter of fiscal year 2009, ending December 31, 2008. The company demonstrated revenue growth of 1.6% year-over-year, reaching $1.73 billion, driven by volume increases and modest price adjustments, though partially offset by unfavorable foreign currency translations. Profitability showed a notable improvement, with diluted earnings per share from continuing operations rising 18% to $1.26 compared to the prior year. This was supported by a higher gross profit margin, attributed to favorable foreign currency impacts, productivity gains, and a favorable product mix, despite some increases in raw material costs. The company also maintained a strong focus on operational efficiency, with selling and administrative expenses as a percentage of revenue decreasing. BDX highlighted its commitment to shareholder returns through significant share repurchases, which increased substantially compared to the prior year. The company's liquidity remains robust, with cash generated from operations expected to cover ongoing needs, including capital expenditures and dividends. Management expressed confidence in the company's ability to navigate the uncertain global economic environment, supported by strategic hedging activities and a strong balance sheet.

Financial Statements
Beta

Key Highlights

  • 1Revenue increased by 1.6% to $1.73 billion for the quarter ended December 31, 2008, compared to the same period in the prior year.
  • 2Diluted Earnings Per Share (EPS) from continuing operations grew by 18% to $1.26 from $1.07 in the prior year's quarter.
  • 3Gross profit margin improved to 53.6% from 51.4% in the prior year, benefiting from foreign currency translation and productivity gains.
  • 4Share repurchases increased significantly, with $283 million utilized in the first quarter of 2009 compared to $123 million in the prior year.
  • 5The company maintains a strong liquidity position, with cash from operations expected to fund normal operating needs, capital expenditures, and dividends.
  • 6Significant legal proceedings related to antitrust claims and product liability are ongoing, with the company actively defending its positions.
  • 7The Medical segment experienced a 2% revenue decrease, while Diagnostics and Biosciences segments saw revenue increases of 3% and 11% respectively, demonstrating varied segment performance.

Frequently Asked Questions

Becton Dickinson reported a 1.6% increase in revenue, reaching $1.73 billion for the quarter ended December 31, 2008. Diluted earnings per share from continuing operations saw significant growth, increasing by 18% to $1.26 compared to $1.07 in the prior year's quarter.

The company experienced unfavorable foreign currency translation due to a strengthening U.S. dollar, which impacted revenues by approximately 3%. However, strategic hedging activities, including forward exchange contracts and currency options, helped mitigate some of these adverse effects, and a stronger U.S. dollar also favorably impacted the cost of goods sold for products sold internationally.

Becton Dickinson demonstrated a commitment to shareholder returns by significantly increasing share repurchases to $283 million in the first quarter of 2009, up from $123 million in the prior year. The company also continued to pay dividends and expects operating cash flow to be sufficient for these activities, as well as for capital expenditures.

BDX is involved in several ongoing legal proceedings, including antitrust class action suits and product liability claims. While the company believes it has meritorious defenses, it acknowledges the uncertain nature of litigation and notes that unfavorable outcomes could have a material adverse effect on its consolidated results of operations and cash flows. Risk factors also include global economic instability, currency fluctuations, and competitive pressures.