By Sam Boughedda
Shares of Becton Dickinson (NYSE:BDX) are up more than 4% Thursday on the back of its fiscal fourth-quarter earnings release, which saw it top revenue estimates.
The company posted earnings of $2.75, in line with the analyst estimate of $2.75, while revenue came in at $4.8 billion versus the consensus estimate of $4.72B.
"Fiscal 2022 was another outstanding year with impactful results that confirm the effectiveness of our BD 2025 strategy," said Tom Polen, chairman, CEO and president of BD. "We delivered reliable, consistent performance that reflects our team's unwavering commitment to our purpose and the execution of our growth plan – while navigating the challenging macro environment all companies are facing."
Looking forward, the company sees FY2023 earnings of $11.85 to $12.10, versus the consensus of $12.19, with revenue for the period expected to be between $18.6B and 18.8B, versus the consensus of $19.37B.
Following the earnings release, KeyBanc Capital Markets analysts told investors in a note that they believe investors will view BDX's release and initial FY23 guidance as mixed with a solid quarter, albeit with a lower gross margin and weaker FY23 guidance.
"Revenue and underlying FXN growth (2.3% vs. KBCM 0.6%) were well ahead, driven by outperformance in BD Medical (10.2% vs. KBCM 5.6%), partially offset by BD Interventional (5.7% vs. KBCM 8.1%) likely reflecting the softer procedural volume backdrop in July and August. Gross margin was again weaker than expected and probably a source of some analyst questions, but operating margin was in line at 22% (vs. KBCM 21.9%) as it managed operational expenses well and the EPS beat was relatively clean," the analysts wrote.
Stifel analysts said in a research note that "despite expected industry-wide macro pressures, most visible on gross margins here, BDX exceeded Stifel/Consensus sales, managed to beat EPS, and achieved the company's full-year operating margin expansion targets."
"Still, gross margins at 52.4% were lower-than-expected (54.0%), we suspect due to the usual macro headwinds, including FX. BD clearly managed to offset those pressures with diligent operating expense management and a lower-than-expected tax rate. All this drove EPS to $2.75, five cents above our estimate. And at first glance, initial F2023 guidance seems more-positive than we would have anticipated given the external environment," the analysts added.