Beckton, Dickinson and Company (BDX -0.86%) closed out its fiscal year with a solid performance even after backing out the contribution from C.R. Bard, which BD acquired earlier this year. The GAAP earnings line didn't look so hot, but was impressive after backing out a one-time large tax bill related to the new tax law and accounting adjustments for acquisitions.

Becton, Dickinson results: The raw numbers


Q4 2018

Q4 2017

Year-Over-Year Change


$4.40 billion

$3.17 million


Income from operations

$570 million

$443 million


Earnings per share (EPS)




Adjusted EPS




Data source: Becton, Dickinson.

What happened with Becton, Dickinson this quarter?

  • Most of the revenue increase comes from the addition of C.R. Bard. On a comparable, currency-neutral basis as if BD owned Bard in the year-ago quarter, revenue was up 8.4%.
  • The medical segment led the way with segment revenue up 10.1% on a comparable, currency-neutral basis, driven by medical management and solutions as well as pharmaceutical systems.
  • Revenue from the life sciences division increased 6.9% on a currency-neutral basis, while the interventional segment increased 6% on a comparable, currency-neutral basis.
  • The U.S. is growing faster than the rest of the world, but international sales were still up a healthy 7.9% on a comparable, currency neutral basis.
  • As promised, the company continued on its acquisition spree, adding the tuck-in acquisition of TVA Medical, which is developing minimally invasive vascular-access solutions for patients with chronic kidney disease who require hemodialysis.
  • The company also got rid of its advanced bioprocessing business, which was generating $100 million annually, shipping the products off to Thermo Fisher Scientific (TMO -0.53%). The price wasn't disclosed, but presumably this was a win-win situation -- with the synergies that Thermo Fisher could get selling the cell-culture media enhancers making the products worth more to Thermo Fisher than they were worth to BD.
Technician helping a patient with an infusion

Image source: Getty Images.

What management had to say

BD's CFO Christopher Reidy talked about the use of the company's operating cash flow, which is expected to hit $4.2 billion next fiscal year:

We're generating a lot of cash, as you see. So we think we can do both. We think we can invest in the business, to continue to grow the business as you would expect, and to still make our commitments on the debt pay-down.

President and chief operating officer Thomas Polen said the company expects to achieve its goal of $250 million in revenue synergies from the integration of Bard by fiscal 2022:

From a timing and phasing over the five-year window that we've talked about, we think about obviously very limited synergies this last year; [2019], it does step up. And then [2020], it kind of doubles off of where we were in [2019], and then it stays relatively at that level, maybe modest increases of those additional gains for the next two years after that. So certainly [2019] is a step-up, but then [2020] continues to step up more ratably.

Looking forward

For the 2019 fiscal year, BD is looking for revenue to increase 5% to 6% on a comparable, currency-neutral basis. The revenue guidance looks rather lackluster, especially given the most recent quarter's 8.4% growth. But management is probably just being conservative considering there are things out of its control, such as how strong the flu season will be, and whether tariffs will go away or get worse.

On the plus side, adjusted earnings are expected to increase faster, growing 13% to 14% on a currency-neutral basis, as management captures cost synergies and lowers interest costs by paying down debt.