BDX - Becton Dickinson sets FY23 outlook below consensus amid currency headwinds

With its Q4 financials for fiscal 2022, COVID-19 test maker Becton, Dickinson ( NYSE: BDX ) exceeded Street forecasts on Thursday, but the company issued a lower-than-expected FY23 guidance citing unfavorable currency impact.

Becton, Dickinson ( BDX ) expects its revenue and adjusted diluted earnings per share to reach $18.6B – $18.8B and $11.85 – $12.10 in FY23, compared to ~$19.4B and $12.24 in the consensus, respectively.

Outlook implies a ~450bps decline to revenue growth and ~420bps impact to adjusted diluted EPS from foreign exchange based on current rates. The company expects COVID-19-only diagnostic testing revenues to reach $125M – $175M in FY23.

Turning to quarterly performance, Becton, Dickinson ( BDX ) reported $4.8B in revenue from continuing operations, indicating a ~2% YoY decline on a reported basis and ~2% YoY growth on a currency-neutral basis.

Full-year revenue also dropped ~1% YoY, as reported to $18.9B but rose ~1% YoY when adjusted for changes in foreign exchange rates.

"We delivered reliable, consistent performance that reflects our team's unwavering commitment to our purpose and the execution of our growth plan – while navigating the challenging macro environment all companies are facing," Chief Executive Tom Polen noted.

Becton, Dickinson's ( BDX ) U.S. revenue grew ~2% YoY to $2.7B, but internationally revenue slipped ~7% YoY to $2.1B.

The segment B.D. Life Sciences, which houses COVID-19 testing, contracted ~16% YoY, bringing $1.3B in revenue, while B.D. Interventional and B.D. Medical added $2.4B and $1.1B with ~6% YoY and ~2% YoY growth, respectively.

The company's gross margin for the quarter improved to ~43.6% from ~43.0% in the prior year's quarter, while reported diluted earnings per share doubled from the past year to $0.92.

Read: Seeking Alpha contributor Andrew Harvey issued a Buy rating on Becton, Dickinson ( BDX ) in October, arguing, among other things, that the market is undervaluing (its) growth and margin optimization."

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