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Becton, Dickinson and Co. (BDX) delivered better than expected fourth quarter EPS. Revenues were in line with expectations. The results have come despite weakness in the U.S., which trimmed down the strengths witnessed globally for its products. However, the company guided fiscal year 2013 below consensus.

The medical technology company reported net income of $289.04 million, down from $299.98 million. However, EPS rose to $1.43 from $1.36 in the last year. On an adjusted basis, EPS from continuing operations grew 7.6% to $1.42 from $1.32. On neutral basis of foreign currency, adjusted EPS from continuing operations recorded a growth of 15.2%. Revenues slackened 1.1% to $1.97 billion from $1.99 billion. Street analysts' were predicting the company to report EPS of $1.40 and revenues of $1.97 billion.

Q1

Q2

Q3

Q4

Total revenue in $ Billion

1.887

1.99

1.98

1.967

Revenue from U.S. in $ Billion

0.829

0.848

0.837

0.832

Revenue from outside US in Billion

1.059

1.143

1.144

1.143

% of U.S. contribution to overall revenue

43.93%

42.61%

42.27%

42.30%

% of outside U.S. contribution to overall revenue

56.12%

57.44%

57.78%

58.11%

Source: Becton, Dickinson and Co.

The above table indicates the continued weakness in the U.S. in the last four quarters. Its revenue contributions slipped to 42.3% in Q4 from 43.9% in Q1. On the other hand, the contributions from outside the U.S. rose to 58.11% from 56.1% in the same period.

In the fourth quarter, BDX revenue from outside the U.S. would have increased 7.1% on a constant currency basis, whereas it has slipped 2.6% due to currency impact. Global sales indicated the company's continued stronghold in the emerging nations and robust sales of its safety-engineered products.

Interestingly, in a research note to clients, Goldman Sachs analyst David Roman viewed the quarterly results of the three segments to be below his expectations due to higher Forex headwind. On a constant currency basis, growth in medical and diagnostics sales were offset by a weaker performance in Biosciences. The overall revenue growth of the global segment, excluding currency effects, was above his estimate of 5.7%.

For the full year period, revenue from the U.S. represented 42.66%, while the international sales represented 57.36%. The company generated revenues of $7.71 billion for the year compared to $7.58 billion previously, representing a 1.6% increase. Profit for the year slipped 8% to $1.17 billion from $1.27 billion, whereas EPS slipped to $5.59 from $5.62. However, adjusted EPS from continuing operations rose to $5.37 from $5.33.

Commenting on the results, BDX chairman, CEO and president said Vincent Forlenza said, "We believe we are well positioned to succeed and will continue to focus on our strategy of investing and innovating for growth. We are confident in our outlook for fiscal year 2013 and remain committed to delivering value to our customers and shareholders."

Looking ahead, the company projects revenues to grow 2% - 3% or 3.5% - 4.5% on a constant currency basis for fiscal year 2013. Similarly, BDX expects adjusted EPS from continuing operations to increase 7% - 8%. Street analysts are predicting the company to deliver EPS growth of 8% on revenue upside of 3.2%.

Meanwhile, David Roman summed up by saying, "Consensus has become increasingly cautious on BDX with shares -860 bp vs. the S&P 500 ytd. The weak FY13 EPS guidance likely fuels some of the concerns regarding the growth outlook; however, we do note that revenue targets are at the high-end of large cap MedTech and EPS looks to have some cushion (FX)." He maintained a Neutral rating.

Source: Becton, Dickinson And Co. Q4 Results: Weakness In U.S. Trims Robust Global Strength