UPDATE: Economy Catches Up To C.R. Bard, Hurts 1Q Sales
22 Abril 2009 - 6:26PM
Noticias Dow Jones
C.R. Bard Inc.'s (BCR) first-quarter net income jumped 45% due
to reduced expenses and year-earlier acquisition charges, but sales
landed well short of forecasts as the usually steady
medical-products maker felt a pinch from the recession.
The Murray Hill, N.J., company is implementing a restructuring
and cost-cutting plan as it rides out tightness in hospital budgets
and tries to protect its goal of increasing earnings per share by
14% this year. The target for double-digit sales growth may be at
risk, however, Chief Executive Timothy M. Ring said on a conference
call.
Bard shares fell 4.7% to $73.99 in after-hours trading after
slipping more modestly to close at $77.66 during Wednesday's
regular trading session.
Ring said that Bard remains very healthy, but that "we are
concerned that a soft-demand environment could continue to weigh on
our results going forward."
Sales in the first quarter rose 2% to $596.4 million, falling
short of the company's target and the average $628.9 million
forecast among analysts surveyed by Thomson Reuters.
Ring noted a handful of first-quarter issues following a fourth
quarter in which Bard appeared to dodge recessionary pressures.
They included distributors reducing inventory, such as with Bard's
urology products, to reduce their own risk amid cutbacks in medical
procedures and tightened hospital budgets.
Bard also makes vascular and cancer-treatment products.
Unfavorable currency rates also hurt sales in the recent
quarter, as did a slowed European business. Bard is planning
restructuring moves in Europe that will address its sales structure
there, Ring noted.
The overall restructuring plan includes consolidating certain
U.S. businesses and realigning certain international sales and
marketing functions, Bard said in a filing with the Securities and
Exchange Commission. The moves will include unspecified job
terminations.
The company expects to incur total pretax charges of $14 million
to $16 million for the plan, which should be substantially
completed in the second quarter, and to ultimately save $25 million
per year, Ring said.
Bard posted first-quarter net income of $113.2 million, or $1.10
a share, up from $78.3 million, or 75 cents a share, a year
earlier. Results in the recent period were reduced by 7 cents due
to the restructuring plan, while a year earlier, earnings per share
were lowered by 30 cents by acquisition-related charges.
Wall Street expected earnings of $1.17 per share in the recent
quarter.
Bard's oncology segment saw the biggest sales gain, 7%, while
Urology posted a 3% drop and vascular-product sales rose 5%.
Looking ahead to the second quarter, Bard forecast sales will
rise by 7% to 10%. Per-share earnings are seen between $1.18 and
$1.22 a share excluding unusual items and amid expectations for
tougher currency-rate comparisons.
Analysts had targeted second-quarter earnings of $1.26 a
share.
-By Jon Kamp, Dow Jones Newswires; 617-654-6728;
jon.kamp@dowjones.com
(Jay Miller and Kevin Kingsbury contributed to this report.)