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Catalent (CTLT) Up 3.5% Since Last Earnings Report: Can It Continue?
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It has been about a month since the last earnings report for Catalent (CTLT - Free Report) . Shares have added about 3.5% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Catalent due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Catalent reported third-quarter fiscal 2023 adjusted loss per share of 9 cents, against earnings per share of $1.04 in the year-over-year period. The bottom line was narrower than the Zacks Consensus Estimate of a loss of 13 cents.
The adjustments include charges related to amortization, and acquisition, integration and other special items’ costs, among others.
The company’s GAAP loss per share was $1.26 during the quarter against the year-over-year period’s earnings per share of 78 cents.
Revenues in Detail
Revenues grossed $1.04 billion in the reported quarter, down 18.5% year over year. However, the metric surpassed the Zacks Consensus Estimate by 11.5%.
At CER, revenues were down 17%.
The top line was hampered by soft performances by both its segment in the reported quarter.
Organic net revenues (excluding the impact of acquisitions, divestitures and currency translation) decreased 19% year over year.
Segments in Detail
Per Catalent’s new organizational structure, it reports via two segments — Biologics and Pharma and Consumer Health.
Revenues in the Biologics segment fell 32.1% year over year on a reported basis (down 32% at CER) to $475 million in the quarter under review.
This compares to our projection of fiscal third-quarter segmental revenues of $485.4 million.
Revenues in the Pharma and Consumer Health segment decreased 1.9% from the year-ago period (up 1% at CER) to $563 million.
This compares to our projection of fiscal third-quarter segmental revenues of $449.2 million.
Operational Update
In the quarter under review, Catalent’s gross profit fell 57.4% to $180 million. The gross margin contracted a huge 1587 basis points to 17.4%.
Selling, general and administrative expenses fell 8.2% to $190 million year over year.
Adjusted operating loss totaled $10 million against the prior-year quarter’s adjusted operating profit of $216 million.
Financial Update
Catalent exited the third quarter of fiscal 2023 with cash and cash equivalents of $252 million compared with $442 million at the end of the fiscal second quarter. Total debt at the end of third-quarter fiscal 2023 was $4.85 billion, flat compared with that at the end of the fiscal second quarter.
Cumulative net cash provided by operating activities at the end of third-quarter fiscal 2023 was $58 million compared with $370 million a year ago.
Guidance
Catalent has reduced its financial outlook for fiscal 2023 from the one it had provided during its presentation of its fiscal third-quarter business update in May.
The company projects revenues within $4,225 million-$4,325 million, down from the previous outlook of $4,250 million-$4,350 million for the full year. The Zacks Consensus Estimate for fiscal 2023 revenues is currently pegged at $4.28 billion.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
The consensus estimate has shifted 246.67% due to these changes.
VGM Scores
At this time, Catalent has a poor Growth Score of F, 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 F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Catalent has a Zacks Rank #5 (Strong Sell). We expect a below average return from the stock in the next few months.
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Catalent (CTLT) Up 3.5% Since Last Earnings Report: Can It Continue?
It has been about a month since the last earnings report for Catalent (CTLT - Free Report) . Shares have added about 3.5% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Catalent due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Catalent Tops Q3 Earnings Estimates, Cuts FY23 View
Catalent reported third-quarter fiscal 2023 adjusted loss per share of 9 cents, against earnings per share of $1.04 in the year-over-year period. The bottom line was narrower than the Zacks Consensus Estimate of a loss of 13 cents.
The adjustments include charges related to amortization, and acquisition, integration and other special items’ costs, among others.
The company’s GAAP loss per share was $1.26 during the quarter against the year-over-year period’s earnings per share of 78 cents.
Revenues in Detail
Revenues grossed $1.04 billion in the reported quarter, down 18.5% year over year. However, the metric surpassed the Zacks Consensus Estimate by 11.5%.
At CER, revenues were down 17%.
The top line was hampered by soft performances by both its segment in the reported quarter.
Organic net revenues (excluding the impact of acquisitions, divestitures and currency translation) decreased 19% year over year.
Segments in Detail
Per Catalent’s new organizational structure, it reports via two segments — Biologics and Pharma and Consumer Health.
Revenues in the Biologics segment fell 32.1% year over year on a reported basis (down 32% at CER) to $475 million in the quarter under review.
This compares to our projection of fiscal third-quarter segmental revenues of $485.4 million.
Revenues in the Pharma and Consumer Health segment decreased 1.9% from the year-ago period (up 1% at CER) to $563 million.
This compares to our projection of fiscal third-quarter segmental revenues of $449.2 million.
Operational Update
In the quarter under review, Catalent’s gross profit fell 57.4% to $180 million. The gross margin contracted a huge 1587 basis points to 17.4%.
Selling, general and administrative expenses fell 8.2% to $190 million year over year.
Adjusted operating loss totaled $10 million against the prior-year quarter’s adjusted operating profit of $216 million.
Financial Update
Catalent exited the third quarter of fiscal 2023 with cash and cash equivalents of $252 million compared with $442 million at the end of the fiscal second quarter. Total debt at the end of third-quarter fiscal 2023 was $4.85 billion, flat compared with that at the end of the fiscal second quarter.
Cumulative net cash provided by operating activities at the end of third-quarter fiscal 2023 was $58 million compared with $370 million a year ago.
Guidance
Catalent has reduced its financial outlook for fiscal 2023 from the one it had provided during its presentation of its fiscal third-quarter business update in May.
The company projects revenues within $4,225 million-$4,325 million, down from the previous outlook of $4,250 million-$4,350 million for the full year. The Zacks Consensus Estimate for fiscal 2023 revenues is currently pegged at $4.28 billion.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
The consensus estimate has shifted 246.67% due to these changes.
VGM Scores
At this time, Catalent has a poor Growth Score of F, 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 F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Catalent has a Zacks Rank #5 (Strong Sell). We expect a below average return from the stock in the next few months.