UPDATE: CR Bard 2Q Profit Up 44% On Margins; Keeps EPS Goal
23 July 2009 - 8:58AM
Dow Jones News
C.R. Bard Inc.'s (BCR) second-quarter profit jumped 44% with
help from prior-year charges and ongoing cost-cutting that has
helped shield the bottom line from pressure on sales growth linked
to the economic downturn.
The company said it won't hit its goal of growing sales in a
double-digit range this year, after falling well short of that
target in the year's first two quarters, but it continues to aim
for full-year 14% growth in per-share earnings.
Though Bard announced a restructuring plan in April alongside a
first-quarter sales miss, Timothy M. Ring, the company's chairman
and chief executive, stressed that these were moves long in
development. The company won't compromise the business to hit an
earnings target, he said on a call with analysts Wednesday.
"We absolutely will not sacrifice our long-term strategy for
short-term results," Ring said.
Bard shares slipped 1.9% to $71.48 in after-hours trading after
declining 2.3% during Wednesday's regular trading session.
Bard's varied portfolio of often-disposable products appeared
through last year to offer cover against cutbacks at hospitals,
where pricey capital equipment has been a more obvious target for
cutbacks. However, sales fell short of Wall Street estimates in the
first quarter as distributors reduced their inventory on certain
Bard products.
C.R. Bard posted a profit of $112.2 million, or $1.11 a share,
up from $77.9 million, or 76 cents a share, a year earlier.
Excluding restructuring and other charges, earnings rose to $1.23
from $1.10.
The company in April projected a range of $1.18 to $1.22 a
share, and analysts surveyed by Thomson Reuters had expected, on
average, $1.21 a share.
Revenue climbed 1.2% to $624.6 million, or 6% excluding currency
changes, missing both company and Wall Street projections.
The company, which announced a restructuring plan in April, has
been controlling its costs. Gross margin in the recent quarter
improved to 61.8% from 60.6% a year ago.
Amid Bard's reduced costs, however, research and development
expenses rose 9.2%.
"We are carefully managing our discretionary expenses while
continuing to invest in R&D and business development to support
our growth objectives," Ring said in a press release.
Among Bard's product areas, sales of vascular products rose 3%
in the quarter to $169.1 million, or 11% excluding the impact of
foreign currency.
Sales in the urology business declined 1% to $174.7 million, but
were up 3% excluding currency. This business continued to feel a
pinch from distributor cutbacks in the second quarter, but the
effect was lighter than it was in the first quarter.
Sales in the oncology business rose 2%, or 6% excluding the
currency impact.
Looking ahead, Bard forecasts 6% to 8% sales growth in the third
quarter, excluding currency, and Ring said the company now sees
growth of 6% to 7% on the year.
The company is targeting $1.25 to $1.29 a share in third-quarter
earnings.
-By Jon Kamp, Dow Jones Newswires; 617-654-6728;
jon.kamp@dowjones.com
(Joan E. Solsman and Kevin Kingsbury contributed to this
report.)