Becton, Dickinson and Co Shows It's "Consistent" and "Reliable" in the Face of Headwinds

The fiscal fourth-quarter revenue at Becton, Dickinson (NYSE: BDX) isn't going to win any growth competitions, but the medical and life sciences conglomerate continues to cut costs, allowing its earnings to grow at a solid clip.

BD results: The raw numbers

What happened with BD this quarter?

• Income and earnings on a GAAP basis grew so much because the year-ago quarter had a large restructuring charge; the 13% growth in adjusted EPS is a better measure of performance.
• The lower year-over-year revenue was due to the sale of its respiratory solutions business last year. On a comparable, currency-neutral basis, fourth-quarter revenue grew 4.4%, which isn't so bad considering there were impacts of hurricanes as well as change in its U.S. dispensing business model.
• BD's life sciences segment saw revenue increase 5.5% year over year. The medical segment fell year over year, although the comparison includes the respiratory solutions divestiture. Backing that out, revenue in the medical segment increased 3.9% at constant currencies.
• The integration of CareFusion continues to benefit the bottom line with $250 million in annualized cost savings on a cumulative basis through the end of the fiscal year, allowing the company to increase margins by 500 basis points over the last three years. This time next year, management thinks the cost synergies will have increased to $350 million.

What management had to say

BD's chairman and CEO Vincent Forlenza seemed content with the performance this fiscal year:

Turning to next year, Forlenza noted that the flu season will have a big impact on where in its guidance range the company ends up:

Looking forward

For its upcoming fiscal year, BD is looking for revenue to grow 5% to 6% on a GAAP basis, which includes a one-percentage-point benefit from currency changes. Adjusted earnings are expected to be between $10.55 and $10.65, about 12% higher than the recently completed fiscal year.

Those numbers will almost certainly be adjusted as they don't include the effects of Hurricane Maria, which affected BD's manufacturing plant in Puerto Rico, nor the acquisition of C.R. Bard (NYSE: BCR) that's scheduled to close before the end of the calendar year.

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Brian Orelli has no position in any of the stocks mentioned. The Motley Fool recommends Becton Dickinson. The Motley Fool has a disclosure policy.