How did foreign currency fluctuations impact BDX's financial results in this period?

Foreign currency translation had a significant unfavorable impact on reported revenues, particularly in the third quarter and nine-month period. For the nine months ended June 30, 2009, the U.S. dollar strengthened against most foreign currencies, leading to an estimated unfavorable impact on revenues. However, the company utilized hedging strategies, primarily forward contracts, to mitigate some of this impact. Hedge gains were recorded in revenues and helped offset some of the negative translation effects.

What is the status of the antitrust class action lawsuits mentioned?

BDX entered into a settlement agreement with the direct purchaser plaintiffs in the 'In re Hypodermic Products Antitrust Litigation'. This settlement requires court approval and is subject to certain conditions, including a ruling on direct purchaser standing. A charge of $45 million related to this pending settlement was recorded in the nine-month period. The company is also still facing claims from indirect purchaser plaintiffs.

How is BDX managing its debt and liquidity?

BDX's liquidity appears strong, with significant cash generated from operations. The company issued $750 million in new long-term debt in May 2009, which increased its total debt to $1.9 billion. This issuance was primarily for general corporate purposes and to refinance existing debt. The company also has a $1 billion syndicated credit facility available. The debt-to-capital ratio stood at 26.5% at the end of June 2009, indicating a manageable leverage position.

What are the key drivers for the change in operating income and profitability?

Operating income from continuing operations increased year-over-year for both the quarter and the nine-month period. This improvement was driven by a higher gross profit margin, which benefited from favorable foreign currency translation impacts, gains from hedging activities, and favorable raw material pricing (resins). Additionally, the company demonstrated disciplined selling and administrative expense management, with expenses as a percentage of revenue decreasing in key segments. A tax benefit recorded in the third quarter also contributed positively to net income.

BDX 10-Q Quarterly Report Q3 FY2009 — Revenue, Net Income, EPS

Summary

Becton Dickinson & Co. (BDX) reported its third-quarter and nine-month results for the period ending June 30, 2009. The company demonstrated resilience amidst a challenging economic environment, with revenues remaining relatively flat year-over-year for the nine-month period and showing a slight decline in the third quarter. This performance was influenced by a significant unfavorable foreign currency translation impact, partially offset by hedging gains and underlying volume increases. The company also saw an improvement in profitability metrics, with operating income increasing for both the nine-month and third-quarter periods compared to the prior year, driven by improved gross profit margins and disciplined expense management. Key financial highlights include solid income from continuing operations and earnings per share growth, driven by operational efficiencies and a favorable tax settlement. The company also managed its liquidity and capital resources effectively, generating significant cash from operations and maintaining a strong credit profile, despite increased debt levels related to recent note issuances. Investors should note ongoing legal proceedings, particularly the antitrust class action settlement, which has been accounted for in the financial results, and the ongoing divestiture of the Home Healthcare product line. The company continues to invest in research and development to support future growth.

Financial Highlights

50 data points

Beta

Revenue

$1.82B

0.5% Gross Margin

Net Income

$341.03M

0.2% Net Margin

EPS (Diluted)

$1.39

Total Assets

$8.85B

Cash & Equivalents

$1.33B

Free Cash Flow

$394.56M

Financial Statements

Beta

Revenue	$1.82B
Cost of Revenue	$860.06M
Gross Profit	$960.19M
SG&A Expenses	$429.94M
Operating Expenses	$1.39B
Operating Income	$431.76M
Interest Expense	$11.29M
Net Income	$341.03M
EPS (Basic)	$1.42
EPS (Diluted)	$1.39
Shares Outstanding (Basic)	240.11M
Shares Outstanding (Diluted)	245.70M

Key Highlights

1For the nine months ended June 30, 2009, BDX reported net income of $914.4 million, an increase from $844.8 million in the prior year, with diluted EPS from continuing operations rising to $3.67 from $3.31.
2Total revenues for the nine months were $5.263 billion, nearly flat compared to $5.262 billion in the prior year, with the Medical and Diagnostics segments showing modest revenue growth, while Biosciences experienced a slight decline.
3Operating income from continuing operations increased to $1.211 billion for the nine-month period, up from $1.146 billion in the prior year, indicating improved operational profitability.
4The company recorded a $45 million charge related to a pending settlement in antitrust class actions during the nine-month period, impacting reported earnings.
5BDX successfully managed its cash flow from operations, generating $1.048 billion in the first nine months of 2009, though this was a decrease from $1.205 billion in the prior year, partly due to higher inventory levels.
6The company issued new long-term debt totaling $750 million in May 2009 to manage its capital structure and fund general corporate purposes, increasing its total debt to $1.9 billion.
7Assets held for sale and liabilities held for sale were reported as of June 30, 2009, related to the divestiture of the Home Healthcare product line, which was completed in July 2009.

BECTON DICKINSON & CO Quarterly Report for Q3 Ended Jun 30, 2009

Summary

Financial Highlights

Key Highlights

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