BD third quarter revenues increase to $2.014 billion

BD (Becton, Dickinson and Company) (NYSE: BDX), a leading global medical technology company, today reported quarterly revenues of $2.014 billion for the third fiscal quarter ended June 30, 2011, representing an increase of 10.0 percent from the prior-year period.  On a foreign currency-neutral basis, revenues increased 4.8 percent.

“We are pleased with our solid results this quarter, with all three segments contributing to growth,” said Edward J. Ludwig, Chairman and Chief Executive Officer.  “Gross margin expansion reflecting favorable product mix has offset some of the headwinds we have been facing as a result of a challenging macroeconomic environment and increased raw material costs.”

Agreement to Acquire Carmel Pharma, AB

On July 27, 2011, the Company announced that it had signed a definitive agreement to acquire Carmel Pharma, AB, a Swedish company that manufactures the PhaSeal® System. This is the leading closed-system drug transfer device for the safe handling of hazardous drugs that are packaged in vials.  The acquisition is expected to close prior to the end of this fiscal year.

Third Quarter and Nine-Month Fiscal 2011 Operating Results

Reported diluted earnings per share from continuing operations for the third quarter were $1.51, compared with $1.23 in the prior-year period, representing a 22.8 percent increase, or 13.8 percent on a currency-neutral basis.

For the nine-month period ending June 30, 2011, reported diluted earnings per share from continuing operations were $4.23, compared with $3.66 in the prior-year period. The prior-year period included a non-cash charge of $8.9 million, or $0.04 per share, related to healthcare reform impacting Medicare Part D reimbursements. Excluding that item, earnings per share from continuing operations increased by 14.3 percent, compared with adjusted diluted earnings per share from continuing operations of $3.70 in the prior-year period, or 8.1 percent on a currency-neutral basis.

Segment Results

In the BD Medical segment, worldwide revenues for the quarter were $1.045 billion, representing an increase of 10.5 percent compared with the prior-year period, or 4.9 percent on a foreign currency-neutral basis. Revenues reflected strong sales of Pharmaceutical Systems products and international safety, along with solid sales of Diabetes Care products.  For the nine-month period ended June 30, 2011, BD Medical revenues increased 4.0 percent, or 1.7 percent on a foreign currency-neutral basis.

In the BD Diagnostics segment, worldwide revenues for the quarter were $631 million, representing an increase of 9.6 percent compared with the prior-year period, or 4.8 percent on a foreign currency-neutral basis. Revenues reflected solid growth in Preanalytical Systems safety-engineered products and strong growth in both the Women’s Health and Cancer and the Infectious Disease product offerings in the Diagnostics Systems unit. For the nine-month period ended June 30, 2011, BD Diagnostics revenues increased 6.4 percent, or 3.9 percent on a foreign currency-neutral basis.

In the BD Biosciences segment, worldwide revenues for the quarter were $338 million, representing an increase of 9.3 percent compared with the prior-year period, or 4.3 percent on a foreign currency-neutral basis. Segment growth was driven primarily by instrument and reagent sales in the Cell Analysis unit. Discovery Labware revenues in the U.S. were negatively impacted by weakness in core consumables. The segment’s revenues also reflected softness in Western Europe due to government research funding delays.  For the nine-month period ended June 30, 2011, BD Biosciences revenues increased by 5.7 percent, or 2.7 percent on a foreign currency-neutral basis.

Geographic Results

Third quarter revenues in the U.S. were $855 million, representing an increase of 5.7 percent compared with the prior-year period.  Revenues outside of the U.S. were $1.159 billion, representing an increase of 13.4 percent compared with the prior-year period, or 4.1 percent on a foreign currency-neutral basis. Revenues reflected continued strength in emerging markets, which was partially offset by ongoing challenging macroeconomic conditions in Western Europe.  For the nine-month period ended June 30, 2011, revenues in the U.S. were $2.513 billion, representing an increase of 2.4 percent compared with the prior-year period. Revenues outside of the U.S. were $3.265 billion, representing an increase of 7.2 percent compared with the prior-year period, or 2.8 percent on a foreign currency-neutral basis.

Fiscal Year 2011 Outlook

Reported revenue growth guidance for the full fiscal year 2011 is expected to be at the higher end of the previously communicated range of 5 to 6 percent compared with fiscal year 2010, due to the anticipated effects of favorable currency. On a foreign currency-neutral basis, the Company is lowering its revenue growth guidance to an increase of about 3 percent versus its previously communicated guidance of about 3.5 percent, mainly due to lower than expected sales in Western Europe.

The Company is raising its previous guidance for reported diluted earnings per share from continuing operations for fiscal year 2011 from $5.55-$5.65 to $5.65-$5.70, an increase of approximately 15 to 16 percent over fiscal year 2010, due to the anticipated effects of favorable currency. Diluted earnings per share from continuing operations for fiscal year 2011 are expected to increase 14 to 15 percent over adjusted diluted earnings per share from continuing operations of $4.94, excluding the specified item, for fiscal year 2010.  The specified item represents the aforementioned 2010 non-cash charge of $0.04 per share related to healthcare reform. On a currency-neutral basis, the Company continues to expect diluted earnings per share from continuing operations to increase about 10 percent over adjusted diluted earnings per share in the prior-year period, despite lower than expected revenue growth and higher resin costs.