Feb 6 (Reuters) - Becton Dickinson and Co’s shares plummeted 10%, the biggest one-day drop in over 20 years, after the medical device maker cut its 2020 forecast expecting a hit from the recall of its Alaris pumps used for infusing drugs into patients’ body.
The company said it expects full-year adjusted earnings to be between $11.90 and $12.10, compared with its prior range of $12.50 to $12.65, as it works with the U.S. Food and Drug Administration to resolve issues with its Alaris system.
The prior forecast range which was largely viewed as conservative and the fact the company had recently said shipments of the pumps had resumed, could especially pressure shares, JP Morgan analyst Robbie Marcus said in a note.
Early last year, the company recalled some of its Alaris pumps, over concerns they could lead to quicker, slower or accidental delivery of medicine.
“We think the guidance cut is baking in close to a worst case and don’t think there is another shoe to fall,” said Evercore ISI analyst Vijay Kumar.
Becton Dickinson said its resolution with the FDA would require additional regulatory filings beyond what was previously expected and said it plans to complete its submissions to the FDA in the fourth quarter of 2020.
The company also reported adjusted earnings of $2.65 per share on sales of $4.23 billion, for the fourth quarter ended December 31. Analysts had expected earnings of $2.63 per share on revenue of $4.18 billion.
Shares of the company were trading at $256.95 in morning trading.
Reporting by Saumya Sibi Joseph in Bengaluru; Editing by Shinjini Ganguli