Becton Dickinson 3rd Quarter Net Slips 4.7%, Cuts Full-Year View

08/02/2012| 06:52am US/Eastern

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   By Saabira Chaudhuri 
 

Becton Dickinson & Co.'s (>> Becton, Dickinson and Co.) fiscal third-quarter earnings fell 4.7%, with higher costs and lower interest income overshadowing modest revenue growth.

The medical device maker cut its full-year guidance on earnings to between $5.33 to $5.38 a share on revenue growth of about 1% from its May forecast of $5.68 to $5.73 a share on 1% to 2% revenue growth. The change, it said, was due to the anticipated effects of unfavorable currency translation as well as the reclassification of its Discovery Labware unit as discontinued operations.

The maker of products like surgical blades and test kits struck a deal in April to sell the bulk of its lab-products business to Corning Inc. (>> Corning Incorporated) for $730 million in cash. Analysts said the sale, expected to close later this year, will strip Becton Dickinson of a cash cow, yet also allow it to focus on businesses with higher growth potential.

For the quarter ended June 30, Becton Dickinson reported a profit of $326.9 million, down from $343.1 million a year earlier. Per-share earnings were $1.59, up from $1.53 a share a year earlier as the number of shares outstanding fell 8.7%. Earnings from continuing operations came in at $1.52 a share.

Revenue increased 1.5% to $1.98 billion. Analysts polled by Thomson Reuters most recently forecast earnings of $1.53 on revenue of $2.02 billion.

Gross margin narrowed slightly to 52.2% from 52.7% while total operating costs and expenses rose 1.8%.

Interest income fell 46% and interest expense rose 57%.

Becton Dickinson's sales were up 1.1% in the U.S. and rose 1.7% internationally--or 7.8% excluding the impact of currency changes.

The company's medical unit, its largest by revenue, reported sales rose 2.4% to $1.07 billion on strength in the diabetes care and pharmaceutical systems units. Excluding the effects of currency changes, sales grew 6.4%.

The diagnostics business posted revenue growth of 1.7%, while biosciences revenue was down 2.7%. Excluding currency effects, the growth was 4.7% and 0.2%, respectively.

Shares closed at $75.18 Wednesday and were inactive premarket. The stock is down 6% in the past 12 months.

Write to Saabira Chaudhuri at saabira.chaudhuri@dowjones.com

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