C.R. Bard (BCR) Up 1.6% Since Earnings Report: Can It Continue?

It has been about a month since the last earnings report for C.R. Bard, Inc. (NYSE:BCR) . Shares have added about 1.6% in the past month, outperforming the market.

Will the recent positive trend continue leading up to the stock's next earnings release, or is it due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.

C.R. Bard Beats Q1 Earnings & Revenues, FY17 View Up

C.R. Bard reported adjusted earnings of $2.87 in the first quarter of 2017, exceeding the Zacks Consensus Estimate of $2.65. Adjusted earnings also improved 22.6% on year-over-year basis.

Net sales during the first quarter increased from $874 million on a year-over-year basis to $938.8 million. The figure was also better than the Zacks Consensus Estimate of $915 million. Excluding the impact of foreign exchange, first-quarter 2017 net sales improved 8% on a year-over-year basis.

C.R. Bard to Get Acquired

On Apr 23, Becton, Dickinson and Company (BDX), a leading global medical technology company, announced that it will acquire C.R. Bard for $24 billion ($317 per C.R. Bard common share in cash and stock). The agreement is expected to close by fall 2017.

We believe the latest development will provide benefits of medication management and infection prevention to C.R. Bard customers and bolster its foothold in the global medical devices market, which is expected to reach a worth of $543.9 billion by 2020.

In this regard, C.R. Bard registered more than 500 products internationally in full-year 2016.

Quarter Highlights

U.S.net sales rose 5% year over year to $657.2 million. International sales increased 14% to $281.6 million.

Without foreign exchange headwinds, first-quarter 2017 net sales outside the U.S. rose 17% on a year-over-year basis.

Segment Details

Vascular product: Sales at this segment increased 7% year over year (up 8% at cc) to $256.6 million.

Urology: Sales increased 10% on a year-over-year basis (up 11% at cc) to $237.7 million in the urology segment.

Oncology: Sales at this segment were up 6% (up 6% at cc) year over year to $255.5 million.

Surgical Specialties: Sales were up 9% (up 9% at cc) year over year to $165.1 million.

Sales from other product lines increased 2% on a year-over-year basis at cc to almost $23 million.

Guidance

For full-year 2017, adjusted earnings per share (after adjusting for amortization of intangibles) are projected between $11.65 and $11.90, up from the previously provided band of $11.45 and $11.75. This represents growth in the range of 13% to 16%, up from 11% to 14% projected earlier.

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C.R. Bard expects net sales growth of 5% to 6% on a reported basis, up from the previously provided guidance range of 4% to 5%. Excluding the impact of foreign exchange, net sales are projected to increase between 6% and 7% from the prior year.

For the second quarter of 2017, net sales are expected to improve in the range of 4% to 5% on an as-reported basis. Excluding the impact of foreign exchange, second-quarter 2017 net sales are forecasted to increase in the range of 6% and 7% on a year-over-year basis.

Adjusted earnings per share (after adjusting for amortization of intangibles and relevant items) are likely to come in between $2.75 and $2.85. This represents growth in the band of 8% and 12% on a year-over-year basis.

How Have Estimates Been Moving Since Then?

Following the release, investors have witnessed a downward trend in fresh estimates. There has been one revision higher for the current quarter compared to five lower.

C.R. Bard, Inc. Price and Consensus

VGM Scores

At this time, the stock has an average Growth Score of 'C', a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of 'D' on the value side, putting it in the bottom 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of 'C'. If you aren't focused on one strategy, this score is the one you should be interested in.

Zacks' style scores indicate that the company's stock is suitable for growth and momentum investors.

Outlook

Estimates have been broadly trending downward for the stock. The magnitude of this revision also indicates a downward shift. Interestingly, the stock has a Zacks Rank #3 (Hold). We are expecting an inline return from the stock in the next few months.

Zacks Investment Research

Written By: Zacks Investment Research