Becton Dickinson CEO: CareFusion Merger Successful, Emerging Markets 'Well-Positioned' For Growth
By Jof Enriquez,
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Becton Dickinson says fourth quarter revenues increased 5.6 percent to $3.23 billion, driven by strong growth in its medical and life sciences units. The three-month period ending Sept. 30 marked the end of BD’s first full fiscal year of successful integration with CareFusion, and the company sees emerging markets as a key driver for growth going into 2017.
"The powerful combination of BD and CareFusion continues to deliver positive results. We've seen significant benefits as a result of this transaction from a customer, employee, and shareholder standpoint. And we think there's more to come," BD CEO Vincent A. Forlenza told analysts in a conference call, according to a Seeking Alpha transcript. "Legacy BD remains solid. And the CareFusion portfolio has performed in line with our expectations."
Heading into fiscal year 2017, the company expects emerging markets to grow high single digits overall, with China growing low double digits and continued strength in Latin America.
"Emerging markets continue to be a key growth driver for the company. We experienced some headwinds this year, particularly in the Middle East and Africa, but remain confident that emerging markets are well positioned for continued growth. We also continue to create new growth opportunities for CareFusion products in these markets and expand their global reach by leveraging BD's international infrastructure," said Forlenza.
For the fourth quarter, BD reported a profit of $19 million, down from $181 million from a year earlier. The company attributed the dip in profit to a $328 million restructuring charge related to the $15 billion CareFusion acquisition last year. However, BD added that cost synergies from the merger have amounted to over $170 million to date, and expects to have more synergies coming.
Despite the profit decline during the past quarter, BD's full-year profits increased 40.4 percent to $976 million and full-year revenues of $12.483 billion increased 21.4 percent over the prior year.
By segment, the medical unit increased quarterly sales by 7.3 percent to $2.24 billion, driven by strong performance in the medication and procedural solutions, medication management solutions, pharmaceutical systems, and diabetes care divisions, according to Market Watch. Sales of the life sciences unit grew 2.1 percent to $996 million on solid showing by the preanalytical systems and biosciences units, which offset some flattening in the diagnostics business.
By region, fourth quarter revenue in the U.S. rose 7.1 percent to $1.748 billion over the prior year, while international revenue grew 3.9 percent to $1.483 billion, led by double-digit growth in China.
“We are extremely proud of our accomplishments during our first fiscal year as the ‘new’ BD,” said Forlenza in a news release. “Our solid revenue growth and continued margin expansion allow us to invest in innovation while delivering double-digit increases in earnings. We look forward to fiscal 2017 with confidence as we continue to focus on improving outcomes, expanding access to care, lowering costs and optimizing safety, which will ultimately enrich our purpose of advancing the world of health.”
Regarding its M&A strategy, company executives told analysts that both strategic tuck-ins and larger deals are on the table, but so are potential share buybacks. They said details will be provided during an analyst day in two weeks, when they will showcase a number of anchor products, value-added services, and complete solutions, in order to demonstrate why they believe BD now has "the most robust pipeline in the history of the company."