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Becton, Dickinson and Company (NYSE:BDX) is slated to report first-quarter fiscal 2012 results before trading opens on February 7. The current Zacks Consensus Estimate for the quarter is $1.17, representing an estimated year-over-year decrease of 13.6%.

Fourth-Quarter Recap

Becton Dickinson reported fourth-quarter fiscal 2011 earnings of $1.39 per share, matching the Zacks Consensus Estimate while beating the year-ago earnings of $1.24. Total revenues increased 9.5% year over year (4% in constant currency) to $2.051 billion, higher than the Zacks Consensus Estimate of $2.025 billion.

Net income for the fourth quarter dropped 24.4% year over year to roughly $300 million (or $1.36 a share). However, net income from continued operations increased 2.8% year over year to $301.4 million, partly on account of higher revenues from different segments.

Domestic sales for the quarter amounted to $843 million, up 1.3% year over year. Overseas revenues were $1.208 billion, up 16% (or 6.1% in constant currency). International sales were driven by sustained growth in emerging nations and robust safety sales.

Estimate Revision Trend

Agreement

The overall trend in estimate revisions for the upcoming quarter is relatively static. Of the 14 analysts covering the stock, there were no upward or downward revisions during the past 7 days. Only one analyst has raised his/her estimate in the past month while none lowered their forecast.

With regard to fiscal 2012, there were no upward or downward revisions during the prior week. Over the past month, no analyst raised his/her estimate while two lowered their estimates. The current Zacks Consensus Estimate for fiscal 2012 is $5.79, reflecting an estimated 3.07% year-over-year growth.

Magnitude

Given the relative lack of estimate revisions, the magnitude of revisions for the forthcoming quarter and fiscal year has hit a plateau, over the past 7 days. Estimates for the forthcoming quarter moved up by a penny over the last 30 days whereas estimates for the fiscal year dropped by a penny.

Becton Dickinson has reported positive earnings surprises in three of the previous four quarters. The company produced an average positive earnings surprise of 5.46% over the prior four quarters, meaning that it beat the Zacks Consensus Estimate by that measure.

Our Take on Becton, Dickinson

Becton Dickinson assumes revenues will increase 1% to 3% (or 2% to 4% in constant currency) for fiscal 2012. The company projects reported earnings per share (from continuing operations) in a band of $5.75 to $5.85 for fiscal 2012. It intends to repurchase, subject to market-related conditions, $1.5 billion of its common stock during the upcoming fiscal year.

We remain cautious about Becton Dickinson due to the lack of major short-term catalysts. The rising demand for safety-needle products (with higher price points and margins) was the primary driver of the company’s past growth, which is not expected to continue, given that the U.S. market is already largely penetrated.

On the positive side, Becton Dickinson’spreeminent global healthcare products franchise is partly insulated from volatile macroeconomic conditions and structural deficiencies elsewhere in the healthcare delivery field.

Further, Becton Dickinson faces a wide range of competitors, including Baxter International (NYSE:BAX) in certain niches, in each of its three business segments. We currently have a long-term Neutral recommendation on the stock. The stock retains a Zacks #4 Rank, which translates into a short-term “Sell” recommendation.

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Source: Becton, Dickinson Earnings Preview