10-QPeriod: Q2 FY2012

BECTON DICKINSON & CO Quarterly Report for Q2 Ended Mar 31, 2012

Filed May 3, 2012For Securities:BDX

Summary

Becton Dickinson & Co. (BDX) reported its fiscal second-quarter 2012 results, showcasing modest revenue growth driven by its Medical and Diagnostics segments, partially offset by softer performance in the Biosciences segment. Overall revenue increased by 3.6% year-over-year, attributed to volume increases in medical devices and laboratory equipment, alongside contributions from recent acquisitions. However, the company faced headwinds from pricing pressures in the U.S. market and within certain product lines, as well as increased raw material costs. Financially, BDX maintained a strong liquidity position, with significant cash flow from operations. The company continued its commitment to shareholder returns through share repurchases and dividend payments. A notable event was the acquisition of KIESTRA Lab Automation BV, which is expected to bolster the Diagnostics segment's lab automation solutions. Looking ahead, BDX anticipates ongoing economic challenges and pricing pressures but remains focused on strategic investments in R&D, geographic expansion, and new product development to drive future growth.

Financial Highlights

50 data points
Beta

Revenue

$1.93B

51.2% Gross Margin

Net Income

$291.03M

15.1% Net Margin

EPS (Diluted)

$1.39

Total Assets

$11.20B

Cash & Equivalents

$1.84B

Free Cash Flow

$167.76M

Financial Statements
Beta
Revenue$1.93B
Cost of Revenue$941.18M
Gross Profit$987.78M
R&D Expenses$116.75M
SG&A Expenses$487.69M
Operating Expenses$1.55B
Operating Income$383.33M
Interest Expense$35.14M
Net Income$291.03M
EPS (Basic)$1.41
EPS (Diluted)$1.39
Shares Outstanding (Basic)206.43M
Shares Outstanding (Diluted)209.80M

Key Highlights

  • 1Total revenues for the second quarter of fiscal year 2012 increased by 3.6% to $1.991 billion compared to the prior year, driven by volume increases (5.7%) partially offset by price decreases (1.1%) and unfavorable foreign currency translation (1.0%).
  • 2Net income for the quarter decreased to $291 million from $312 million in the prior year, with diluted earnings per share from continuing operations remaining flat at $1.38, though impacted by foreign currency fluctuations.
  • 3The Medical segment saw a 4.1% revenue increase to $1.021 billion, driven by Diabetes Care and Pharmaceutical Systems, while the Diagnostics segment grew 4.1% to $630 million, boosted by Preanalytical Systems.
  • 4The Biosciences segment experienced slower growth of 1.3% to $340 million, impacted by reduced research funding in the U.S. and increased competition.
  • 5The company completed the acquisition of KIESTRA Lab Automation BV for $59.5 million, aimed at enhancing its lab automation solutions within the Diagnostics segment.
  • 6Cash generated from continuing operations was $610 million for the first six months of fiscal year 2012, demonstrating solid operational cash flow.
  • 7BDX repurchased approximately $1 billion of its common stock and paid $188 million in dividends during the first six months of the fiscal year, returning value to shareholders.

Frequently Asked Questions

Becton Dickinson's total revenue for the second quarter of fiscal year 2012 increased by 3.6% to $1.991 billion. This growth was primarily driven by volume increases (5.7%) across its Medical and Diagnostics segments, partly due to new product launches and contributions from recent acquisitions. The Medical segment grew 4.1% to $1.021 billion, and the Diagnostics segment increased 4.1% to $630 million.

Net income decreased to $291 million in the second quarter of fiscal year 2012 from $312 million in the prior year. Diluted earnings per share from continuing operations remained flat at $1.38, although this figure was unfavorably impacted by foreign currency translation. The decrease in net income and pressure on margins were influenced by factors such as unfavorable pricing impacts, increased raw material costs, and the amortization of intangibles from recent acquisitions.

Becton Dickinson acknowledged a challenging economic environment characterized by pricing pressures, particularly in the U.S. market, and constraints on healthcare spending in the U.S. and Western Europe. The company also noted increased raw material costs. Management expects these conditions to persist through fiscal year 2012. Additionally, the company highlighted the upcoming U.S. medical device excise tax (2.3% starting in 2013) as a significant future impact.

The company demonstrated strong financial health with $610 million in cash generated from continuing operations in the first six months of fiscal year 2012. BDX continued to return value to shareholders by repurchasing approximately $1 billion of its common stock and paying $188 million in dividends during the same period. The company also secured significant long-term debt financing in late 2011 to support its corporate purposes.