Summary
Becton, Dickinson and Company (BDX) reported for the quarter ending December 31, 2016, a decrease in revenue of 2.1% to $2.922 billion, largely attributed to the divestiture of the Respiratory Solutions business. Despite the revenue dip, the company demonstrated robust operating performance, with operating income increasing significantly compared to the prior year, bolstered by improved gross profit margins and cost efficiencies. Net income saw a substantial rise to $562 million, or $2.58 per diluted share, up from $229 million, or $1.06 per diluted share, in the prior year's period. This improvement was notably influenced by the reversal of a significant litigation reserve. The company actively managed its capital structure during the quarter, issuing euro-denominated debt and repurchasing substantial amounts of its long-term debt. Shareholder returns were maintained through dividend payments and significant share repurchases under an accelerated share repurchase program. While facing ongoing challenges such as foreign currency fluctuations and pricing pressures, BDX's strategic focus on core business expansion, innovation, and operational efficiency positions it to navigate the dynamic healthcare landscape.
Financial Highlights
53 data points| Revenue | $2.92B |
| Cost of Revenue | $1.47B |
| Gross Profit | $1.45B |
| R&D Expenses | $182.00M |
| SG&A Expenses | $709.00M |
| Operating Expenses | $2.11B |
| Operating Income | $811.00M |
| Interest Expense | $95.00M |
| Net Income | $562.00M |
| EPS (Basic) | $2.64 |
| EPS (Diluted) | $2.58 |
| Shares Outstanding (Basic) | 213.06M |
| Shares Outstanding (Diluted) | 217.74M |
Key Highlights
- 1Total revenues decreased by 2.1% to $2.922 billion, primarily due to the divestiture of the Respiratory Solutions business which represented approximately 7% of the revenue decline.
- 2Operating income significantly improved, driven by a higher gross profit margin (49.7% vs. 47.1%) and a reduction in selling and administrative expenses as a percentage of revenue, partly due to the divested business and the suspension of the medical device excise tax.
- 3Net income more than doubled to $562 million from $229 million in the prior year, with diluted EPS rising to $2.58 from $1.06, significantly boosted by a $336 million reversal of litigation reserves.
- 4The company issued €1 billion in euro-denominated debt and used proceeds to repurchase $1.764 billion of long-term debt, demonstrating active debt management.
- 5Cash flow from operations remained strong at $315 million, although lower than the prior year's $463 million, while investing activities generated $48 million, primarily from divestiture proceeds.
- 6Shareholders received $156 million in dividends and the company repurchased approximately $220 million of its common stock under an accelerated share repurchase agreement.
- 7The Medical segment's revenue decreased 4.4% largely due to the Respiratory Solutions divestiture, but its operating income margin improved significantly to 27.9% from 22.6%.