Bard C R (NYSE:BCR)
Historical Stock Chart

From May 2019 to May 2024

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.)