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Becton Dickinson and Company Reports Operating Results (10-Q)

August 06, 2012 | About:
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10qk

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Becton Dickinson and Company (BDX) filed Quarterly Report for the period ended 2012-06-30.

Becton, Dickinson And Co. has a market cap of $15.07 billion; its shares were traded at around $75.03 with a P/E ratio of 13.6 and P/S ratio of 1.9. The dividend yield of Becton, Dickinson And Co. stocks is 2.4%. Becton, Dickinson And Co. had an annual average earning growth of 11.9% over the past 10 years. GuruFocus rated Becton, Dickinson And Co. the business predictability rank of 5-star.

Highlight of Business Operations:

Medical operating income for the third quarter was $324 million, or 30.3% of Medical revenues, compared with $324 million, or 31.0% of segment revenues, in the prior years quarter. Gross profit margin was lower in the current quarter than the third quarter of 2011 due to amortization of intangibles associated with the Carmel acquisition and unfavorable pricing impacts on certain product lines. These unfavorable impacts on gross profit margin were partially offset by favorable foreign currency translation and lower manufacturing costs from Project ReLoCo, a global, cross-functional business initiative to drive sustained low-cost capability primarily benefitting Medical Surgical Systems. See further discussion on gross profit margin below. Selling and administrative expense as a percentage of Medical revenues in the third quarter of 2012 was lower than in the third quarter of 2011, primarily due to spending controls, partially offset by increased spending for expansion in emerging markets and higher expenses resulting from the Carmel acquisition as compared with the prior years period. Research and development expenses for the quarter increased $4 million, or 12%, above the prior years period. Segment operating income for the nine-month period was $863 million, or 28.4% of Medical revenues, compared with $887 million, or 30.0% in the prior years period.

Biosciences operating income for the third quarter was $67 million, or 25.0% of Biosciences revenues, compared with $64 million, or 23.4% of segment revenues, in the prior years quarter. Gross profit margin was lower in the current quarter than the first quarter of 2011 primarily due to amortization of capitalized software and intangibles associated with the Accuri Cytometers, Inc. (Accuri) acquisition that occurred in the second fiscal quarter of 2011. These unfavorable impacts to gross profit margin for the third quarter were partially offset by favorable foreign currency translation. See further discussion on gross profit margin below. Selling and administrative expense as a percent of Biosciences revenues for the quarter was lower compared with the prior years quarter primarily due to favorable foreign currency translation. This favorable impact was partially offset by increased spending for expansion in emerging markets and the effect of marginal revenue growth in the current years period as compared with the prior years period. Research and development expenses in the quarter decreased $2 million, or 8%, compared the prior years period. Segment operating income for the nine-month period was $200 million, or 24.7% of Biosciences revenues, compared with $202 million, or 25.2% in the prior years period.

Selling and administrative expense was 25.1% of revenues for the nine-month period of fiscal year 2012, compared with 24.0% for the prior years period. Aggregate expenses for the nine-month period of 2012 reflected an increase in core spending of $90 million, primarily relating to expansion of our business in emerging markets, transactions costs relating to the KIESTRA acquisition and higher expenses resulting from the Carmel and KIESTRA acquisitions. Aggregate expenses for the nine-month period also included $14 million in higher corporate legal fees and increased spending of $16 million related to our global enterprise resource planning initiative to update our business information systems. Additionally, aggregate expenses in the nine-month period included a $1 million increase in the deferred compensation plan liability, as further discussed below. These increases were partially offset by favorable foreign currency translation of $17 million and lower pension costs of $9 million.

Research and development expense was $115 million, or 5.8% of revenues, for the third quarter, compared with $114 million, or 5.8% of revenues, in the prior years period. Research and development expense was $344 million, or 6.0% of revenues, for the nine-month period in the current year, compared with the prior years amount of $345 million, or 6.2% of revenues. Research and development spending for the total fiscal year 2012 is expected to be comparable, as a percentage of revenues, with the spending in total fiscal year 2011.

Income from continuing operations and diluted earnings per share from continuing operations for the third quarter of 2012 were $312 million and $1.52, respectively. Income from continuing operations and diluted earnings per share from continuing operations for the prior years third quarter were $322 million and $1.44, respectively. The current quarters earnings reflected an estimated $0.06 per share unfavorable impact due to foreign currency translation. For the nine-month periods, income from continuing operations and diluted earnings per share from continuing operations were $835 million and $3.95, respectively, in 2012 and $916 million and $4.02, respectively, in 2011. The current periods earnings reflected an estimated $0.11 per share unfavorable impact due to foreign currency translation.

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