Can't Beat BD's Steady Growth

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Yesterday, Becton, Dickinson's (NYSE: BDX) fiscal fourth-quarter results offered more of the same steady growth for the medical technology company.

Revenue grew 13% year over year, to $1.65 billion for the quarter. All three of BD's segments -- diagnostic, medical, and biosciences -- enjoyed revenue expansion in the high single to double digits.

The company's gross margin improved by 40 basis points, thanks to productivity improvements and the dumping of some its less profitable products. Unfortunately, start-up costs on new products weighed down those results. Hopefully, we'll see continued improvements in future quarters as those business lines mature.

Increased revenue and decreased expenses are always a good combination, driving net income up 44% year over year. EPS rose even more, besting the year-ago quarter by 45.6%, thanks to the $450 million worth of stock the company repurchased in the last year.

One market the company expects to expand rapidly in the coming years involves detection tests for the "superbug" known as methicillin-resistant Staph aureus (MRSA). Through its acquisition of GeneOhm, BD acquired the first FDA-approved assay that can detect MRSA in less than two hours. That's a strong improvement compared to the traditional culture-based method, which takes a day or more to yield results. However, BD will have to compete against Cephid (Nasdaq: CPHD) and its rival one-hour test.

For fiscal 2008, BD expects to see more of the same strong growth, with 10% to 12% expansion in diluted EPS. With a P/E in line with other medical technology companies like Baxter (NYSE: BAX) and Beckman Coulter (NYSE: BEC), expect similar growth in the stock price, as long as management can deliver more of the same.

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