Nearly two full years into the pandemic, COVID-19 still has the power to make or break a company’s bottom line.
In BD’s case, even though the medtech giant spent the last year introducing new devices and diagnostics and making acquisitions to break into new businesses, it still reported a drop in revenue for the first quarter of its 2022 fiscal year, attributed almost solely to a sharp dip in COVID-related earnings.
BD raked in just under $5 billion for the three-month period ending Dec. 31. That marks a 6% decline compared to the first fiscal quarter of the previous year, when it took in $5.3 billion.
Subtracting the impact of COVID-only diagnostic testing from those totals, however, tells a completely different story. Without those test sales, BD earned $4.8 billion for the quarter, which represents an increase of 8.1% over the previous year’s $4.5 billion COVID-less haul.
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That stark difference comes from the fact that BD’s COVID testing revenues for the period amounted to less than a quarter of what it earned in the last three months of 2020—as the coronavirus case count was surging steadily upwards and before vaccines were widely available.
At that time, following the first quarter of its fiscal year 2021, BD reported a massive $866 million take from COVID test-related sales alone. A year later, that number had dropped to $185 million.
Still, the drop in testing revenues—and its mighty effect on quarterly earnings—wasn’t unexpected. In fact, BD’s first-quarter COVID revenues actually outstripped its own forecasts, prompting the company to up its outlook for the full year.
Because that $185 million quarterly total almost met the previous full-year forecast of $200 million in COVID-related earnings, BD has more than doubled its prediction, now expecting to take in about $450 million in the segment throughout its fiscal year 2022. That, in turn, sends its overall revenue forecast up, with BD now predicting a full-year total between $19.55 billion and $19.75, compared to initial expectations that it would fall closer to the $19.3 billion to $19.5 billion range.
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To maintain that growth, CEO Tom Polen said in a statement that BD would continue ramping up innovation across its three core segments—medical, life sciences and interventional—and further build out those businesses with more tuck-in acquisitions.
It’s already off to a solid start in the latter category. During the first quarter of its fiscal year, it announced the acquisitions of Scanwell Health, Venclose and Tissuemed, and just this week, it added cancer blood test maker Cytognos to the lineup.
It’s also busy finalizing the spinoff of its diabetes business into a standalone public company, to be named Embecta. With this week’s sign-off from BD’s board of directors, the separation is slated to occur April 1.
Embecta will be led by Devdatt Kurdikar, currently the worldwide president of BD’s diabetes division. That division alone was responsible for about $1.2 billion in revenue for all of fiscal year 2021, which BD is hoping will give Embecta the head start it needs to take the diabetes market by storm.