BD (BDX) Gears Up for Q1 Earnings: What's in the Offing?

Becton Dickinson and Company BDX, popularly known as BD, is scheduled to report first-quarter fiscal 2022 results on Feb 3, before market opens.

In the last-reported quarter, the company’s earnings of $2.59 per share surpassed the Zacks Consensus Estimate by 6.6%. Over the trailing four quarters, its earnings outperformed the Zacks Consensus Estimate on all occasions, delivering an earnings surprise of 16.95%, on average.

Let’s see how things have shaped up prior to this announcement.

Factors to Note

BD Life Sciences

During its fiscal 2021 fourth-quarter earnings call, BD confirmed that hospitals had resumed service to both COVID and non-COVID patients. The resumption in service and increased overall healthcare utilization levels have been leading to strong demand for the company’s broad portfolio of products that are essential to patient care, including new products delivered across its innovation pipeline. This trend is likely to have continued in the to-be-reported quarter as well, driving BD’s overall top line.

During the same call, BD confirmed that it has been registering strong performances from its Biosciences business over the past few months on the back of solid demand for research solutions as lab utilization returns to normal levels. Further, the company’s newly launched e-commerce site has been receiving encouraging acceptance. The company expects these trends to have continued in the to-be-reported quarter, thereby contributing to revenues.

Becton, Dickinson and Company Price and EPS Surprise

Becton, Dickinson and Company Price and EPS Surprise

Becton, Dickinson and Company price-eps-surprise | Becton, Dickinson and Company Quote

BD, in October 2021, started to ship the BD Veritor At-Home COVID-19 Test, which is currently available for purchase on Amazon. Further, the company has been registering strong growth in sales of BD MAX IVD assays over the past few months. These are expected to considerably drive the company’s revenues in the first quarter of fiscal 2022.

A notable development in the to-be-reported quarter is the addition to BD’s new distribution and retail partners. The company, in December 2021, announced the BD Veritor At-Home COVID-19 Test will be available for purchase through Everly Health, Southeastern Grocers (parent company of Fresco y Más), Harveys Supermarket and Winn-Dixie stores. The same month, BD completed the buyout of privately held Scanwell Health Inc. Also, in December, the company announced that it had expanded the BD COR System to include a new MX instrument for high-throughput molecular testing for infectious diseases. These developments buoy optimism on the stock.

BD Interventional

In October 2021, BD received the FDA’s 510(k) clearance for expanded indications for the Rotarex Atherectomy System. The Rotarex System, already cleared for use in native arterial vessels, currently has the expanded indications to treat within peripheral arteries fitted with stents, stent grafts, and native or artificial bypasses. This raises our optimism on the stock.

Sustained recovery in elective procedures, and strength in infection prevention, biosurgery and hernia repair despite some impacts from the Delta variant is also likely to have contributed to segmental revenues in the fiscal first quarter.

The recently-closed buyouts of Tissuemed, Ltd. and Venclose, Inc. in December 2021 also look promising for the stock.

The Zacks Consensus Estimate for fiscal first-quarter BD Interventional revenues is pegged at $1.14 billion, suggesting an improvement of 5.6% from the year-ago quarter’s reported figure.

Other Factors to Note

BD is likely to have witnessed higher revenues at its BD Medical segment in the to-be-reported quarter. This upside is expected to have been driven by strong recovery in the United States, led by robust growth in catheters and vascular care devices. Also, the company’s new Nebraska-based manufacturing unit is expected to boost the availability of syringes and needles, thereby driving the segmental revenues in the fiscal first quarter.

However, BD anticipates that the to-be-reported quarter’s results might continue to be impacted by lower pricing of COVID-19 testing in the market.

The Estimate Picture

For first-quarter fiscal 2022, the Zacks Consensus Estimate of $4.76 billion for total revenues implies a decline of 10.4% from the prior-year quarter’s reported figure.

The consensus estimate for earnings per share is pegged at $2.85, indicating a decline of 37.4% from the prior-year period’s reported number.

What Our Model Suggests

Our proven model predicts an earnings beat for BD this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), #2 (Buy) or #3 (Hold) increases the chances of an earnings beat.

Earnings ESP: BD has an Earnings ESP of +3.20%. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

Zacks Rank: The company currently carries a Zacks Rank #3.

Other Stocks Worth a Look

Here are a few medical stocks worth considering, as these have the right combination of elements to beat on earnings this reporting cycle.

AMN Healthcare Services, Inc. AMN has an Earnings ESP of +10.29% and a Zacks Rank of 2. AMN has an estimated long-term growth rate of 16.2%.

AMN Healthcare’s earnings surpassed estimates in the trailing four quarters, the average surprise being 19.51%. You can see the complete list of today’s Zacks #1 Rank stocks here.

Laboratory Corporation of America Holdings LH or LabCorp has an Earnings ESP of +9.21% and a Zacks Rank of 1, at present. LH has an estimated long-term growth rate of 10.6%.

LabCorp’s earnings surpassed estimates in all of the trailing four quarters, the average surprise being 25.73%.

Henry Schein, Inc. HSIC has an Earnings ESP of +2.62% and is a Zacks #2 Ranked stock. HSIC has an estimated long-term growth rate of 11.8%.

Henry Schein’s earnings surpassed estimates in the trailing four quarters, the average surprise being 21.86%.

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