01—Abstract
Summary
Summary of the 10-Q filed May 2, 2024. Cited figures are marked; the original filing is the authoritative source.
Becton Dickinson & Co. (BDX) reported solid revenue growth for the third quarter of fiscal year 2024, with total revenues increasing by 4.6% year-over-year to $5.045 billiona.
This growth was driven by broad-based strength across its segments, particularly the Interventional segment, which saw a 9.0% increase in revenue, and the Medical segment's 3.8% rise. Net income applicable to common shareholders rose to $537 millionb from $438 million in the prior year, and diluted Earnings Per Share (EPS) improved to $1.85 from $1.53. The company's financial condition remains robust, with operating cash flows of $1.369 billion for the first six months of fiscal 2024.
BDX also continued to return capital to shareholders through dividends, distributing $550 millionc. Despite some headwinds such as increased raw material and labor costs, and specific market dynamics in China, the company demonstrated effective cost management, with selling, general, and administrative expenses decreasing as a percentage of revenue. The company's outlook remains focused on its BD 2025 strategy centered on growth, simplification, and empowerment.
02—Key points
Key Highlights
- Total revenues increased 4.6% to $5.045 billion for the three months ended March 31, 2024, compared to $4.821 billion in the prior year.
- Net income applicable to common shareholders increased to $537 million ($1.85 diluted EPS) from $438 million ($1.53 diluted EPS) in the prior year.
- The Interventional segment showed strong performance with a 9.0% revenue increase, driven by the Urology and Critical Care unit (up 26.1%) and Peripheral Intervention (up 4.3%).
- Operating cash flow for the six months ended March 31, 2024, was $1.369 billion, a significant increase from $584 million in the prior year.
- The company paid $550 million in dividends to common shareholders in the first six months of fiscal year 2024.
- Selling and administrative expenses as a percentage of revenue decreased in both the three-month and six-month periods, indicating improved operational efficiency.
- The company reported $3.222 billion in cash and equivalents and short-term investments as of March 31, 2024, providing strong liquidity.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q2 FY2024, Becton Dickinson & Co kept $0.11.
- Revenue$5.04B100.0%
- Cost of revenue−$2.74B54.3%
- Gross profit$2.30B45.7%
- Operating costs−$1.57B31.1%
- Operating income$734.0M14.5%
- Interest, other & tax−$197.0M3.9%
- Net income$537.0M10.6%
04—Financials
Financial Highlights
Figures from 10-QQ2 FY2024filed May 2, 2024Financial Statements
Q2 FY2024 against Q2 FY2023
| Line item | Q2 FY2024Q2 FY2023 | Change |
|---|---|---|
| Revenue | $5.04B$4.82B | +4.6% |
| Cost of Revenue | $2.74B$2.59B | +6.0% |
| Gross Profit | $2.30B$2.23B | +3.1% |
| R&D Expenses | $299.00M$337.00M | −11.3% |
| SG&A Expenses | $1.19B$1.21B | −1.0% |
| Operating Expenses | $4.31B$4.19B | +2.8% |
| Operating Income | $734.00M$628.00M | +16.9% |
| Interest Expense | $125.00M$118.00M | +5.9% |
| Net Income | $537.00M$460.00M | +16.7% |
| EPS (Basic) | $1.85$1.54 | +20.1% |
| EPS (Diluted) | $1.85$1.53 | +20.9% |
| Shares Outstanding (Basic) | 289.52M284.29M | +1.8% |
| Shares Outstanding (Diluted) | 290.34M285.64M | +1.6% |
05—Questions
Frequently Asked Questions
What was the primary driver of revenue growth in the third quarter of fiscal year 2024?
The primary driver of revenue growth was a broad-based increase across BDX's segments, notably strong performance in the Interventional segment (up 9.0%) and continued growth in the Medical segment (up 3.8%). Specific units like Urology and Critical Care within Interventional and Peripheral Intervention also showed significant gains.
How did BDX manage its expenses despite rising costs?
BDX demonstrated effective cost management. Selling and administrative expenses as a percentage of revenue decreased in both the three-month and six-month periods. This was achieved through revenue growth outpacing spending, cost containment measures, and lower shipping costs, among other efficiencies, which helped offset increased raw material and labor costs.
What is the company's liquidity position, and how is it managing its cash?
BDX maintains a strong liquidity position, with approximately $3.222 billion in cash and equivalents and short-term investments as of March 31, 2024. The company generated $1.369 billion in operating cash flow for the first six months of fiscal 2024 and continued to return value to shareholders through consistent dividend payments totaling $550 million.
Are there any significant legal or regulatory matters that investors should be aware of?
BDX is involved in various legal proceedings, including product liability claims related to hernia repair devices and pelvic mesh products. The company also continues to address regulatory matters, including an ongoing consent decree with the FDA related to its Alaris infusion pump. While the company has received 510(k) clearance for an updated Alaris system, ongoing remediation and replacement efforts are expected over several years. The company has an accrual of approximately $1.7 billion for product liability claims as of March 31, 2024.
06—Continue