A nearly $900 million award from W.L. Gore boosted C.R. Bard’s bottom line in Q4 as sales inch up 3% in 2013: Officials announce $500 million share buyback plan.
C.R. Bard (NYSE:BCR) sowed the fruits of victory from its decades-long patent infringement war with W.L. Gore & Assoc. during the 4th quarter, reporting a massive bottom-line boost from its legal win.
Bard, which last year won a patent infringement decision over stent graft technology, began receiving royalty payments from Gore in October 2013, recording a pre-tax gain of $894.3 million during the 3 months ended Dec. 31, 2013.
Bard also boosted its bottom line with an additional $213.0 million related to the sale of its electrophysiology division to Boston Scientific (NYSE:BSX), which closed during the quarter.
Murray Hill, N.J.-based Bard posted profits of $667.5 million, or $8.28 per share, on sales of $791.3 million. That’s a whopping 420.7% bottom-line gain on sales growth of 3.8% compared with the same perdiod last year. Adjusted to exclude 1-time items, profits were$114.7 million, or $1.42, down some 20.3% compared with Q4 2012.
Investors on Wall Street, hoping for adjusted earnings per share of $1.85, sent BCR shares down 1.1% Jan. 31, to a $129.59 close. The stock was trading at $127.68 per share today as of about 10:20 a.m. today, down 1.5%.
Full-year profits were $689.8 million, or $8.39 per share, on sales of $3.05 billion, for profit growth of 30.1% on sales growth of 3.1%. Adjusted profits were $474.9 million, or $5.78 per share, down 16.0% compared with 2012.
"We are pleased with the results from the first year of our investment and transition plan announced a year ago. We are executing on a strategy with the objective to shift the mix of the portfolio to faster growth through investments in emerging markets and new product categories; and our business development activities are helping to improve the long-term revenue growth profile of the business," chairman & CEO Timothy Ring said in prepared remarks.
Bard CFO Christopher Holland told analysts during a conference call that the company expects adjusted EPS growth of 26%-27%, or $8.20 to $8.27, on constant-currency sales growth of between 6% and 8%, including $130 million to $140 million in payments from Gore.
First-quarter adjusted EPS are pegged at $1.83-$1.87 on sales growth of 6%-7%, Holland said.
We’re forecasting Q1 2014 with adjusted cash EPS between $1.83 and $1.87 per share compared to the prior year at $1.61. We expect Q1 sales growth to be between 6% and 7%, including the first quarterly royalty payment being received from Gore.
Bard also announced a plan to repurchase of up to $500 million of the company’s stock.
