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Neogen Corporation (NEOG - Free Report) reported first-quarter fiscal 2025 adjusted earnings per share (EPS) of 7 cents, down 36.4% from the prior-year quarter's registered numbers. The bottom line missed the Zacks Consensus Estimate by 30%.
Revenues fell 5.2% on a year-over-year basis to $217 million. Core revenues declined 1.4%. Acquisitions and discontinued product lines did not impact core growth, while foreign currency had a negative impact of 3.9%. However, the metric surpassed the Zacks Consensus Estimate by 0.4%.
Stay up-to-date with all quarterly releases:See Zacks Earnings Calendar.
Neogen’s Segments in Detail
The company's Food Safety segment registered revenues of $159.3 million, marking a 4.2% decrease year over year. Our model projected the segment’s revenues to be $152.3 million for the fiscal first quarter. This consisted of 1.1% core growth, a 0.1% contribution from acquisitions and discontinued product lines and a negative foreign currency impact of 5.4%. The core revenue growth was led by solid performance in biosecurity and indicator testing, culture media & other product categories, including Petrifilm.
Revenues from Animal Safety totaled $57.6 million, down 8.1% year over year. Our model’s projection was $64 million. This consisted of a 7.8% core revenue decline and a 0.3% headwind from discontinued products. On a global basis, the company’s Genomics business experienced a core revenue decline in the mid-single-digit range.
Neogen’s Margin Details
The fiscal first-quarter gross profit declined 10.1% year over year to $104.9 million. The gross margin contracted 263 basis points (bps) to 48.4% despite a 0.2% decrease in the cost of revenues.
Sales and marketing expenses amounted to $45.8 million, almost flat year over year, whereas administrative expenses increased 14.5% from the prior-year quarter to $51.7 million. R&D expenses totaled $5.2 million, down 22.7% year over year. Operating costs totaled $102.7 million, up 5.2% from that reported a year ago. The operating margin fell 732 bps in the quarter under review.
Neogen’s Cash Position
Neogen exited the first quarter with cash and cash equivalents of $120.5 million compared with $170.6 million at the end of fiscal 2024. The company’s non-current liabilities included a total outstanding debt of $900 million and committed borrowing headroom of $150 million.
Neogen Corporation Price, Consensus and EPS Surprise
Neogen maintained its previously stated financial outlook for fiscal 2025.
The company anticipates full-year revenues to be between $925 million and $955 million. The Zacks Consensus Estimate is currently pegged at $983.2 million.
Capital expenditures are likely to be approximately $85 million, including almost $55 million related to the integration of the former 3M Food Safety Division.
Our Take
Neogen exited the fiscal first quarter on a mixed note, wherein earnings missed the Zacks Consensus Estimate but revenues beat the same. The Animal Safety segment posted lower quarterly sales due to lower sales in animal care & other and biosecurity product categories.
Within Food Safety, core growth was led by Indicator Testing, Culture Media and other product categories, which benefited from strong growth in the Petrifilm product line and Food Quality, Nutritional Analysis and Culture Media. Despite the successful reallocation of the 3M sample collection product line, the company fell short of keeping up with end-user demand, which weighed on the sample collection sales in the quarter.
Additionally, the contraction of both margins in the quarter is discouraging. Foreign currency turned out to be a major headwind.
NEOG’s Zacks Rank and Key Picks
Neogen currently carries a Zacks Rank #4 (Sell).
Some better-ranked stocks from the broader medical space are Addus HomeCare (ADUS - Free Report) , AdaptHealth Corp. (AHCO - Free Report) and Abbott Laboratories, Inc. (ABT - Free Report) .
The company reported a second-quarter adjusted EPS of $1.35, which surpassed the Zacks Consensus Estimate by 12.5%. Revenues of $286.9 million exceeded the Zacks Consensus Estimate by 1.1%. ADUS beat on earnings in each of the trailing four quarters, the average surprise being 11.45%.
AdaptHealth, carrying a Zacks Rank #2 (Buy) at present, reported second-quarter 2024 EPS of $2.11, which surpassed the Zacks Consensus Estimate by 10.5%. Revenues of $806 million topped the consensus estimate by 0.4%. The company’s earnings surpassed estimates in three of the trailing four quarters and missed in one, the average surprise being 40.97%.
Abbott, carrying a Zacks Rank #2 at present, reported second-quarter 2024 EPS of $1.14, which surpassed the Zacks Consensus Estimate by 3.6%. Revenues of $10.38 billion topped the Zacks Consensus Estimate by 0.3%. The company beat on earnings in each of the trailing four quarters, the average surprise being 2.34%.
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Neogen Q1 Earnings Miss Estimates, Margins Crash
Neogen Corporation (NEOG - Free Report) reported first-quarter fiscal 2025 adjusted earnings per share (EPS) of 7 cents, down 36.4% from the prior-year quarter's registered numbers. The bottom line missed the Zacks Consensus Estimate by 30%.
Revenues fell 5.2% on a year-over-year basis to $217 million. Core revenues declined 1.4%. Acquisitions and discontinued product lines did not impact core growth, while foreign currency had a negative impact of 3.9%. However, the metric surpassed the Zacks Consensus Estimate by 0.4%.
Stay up-to-date with all quarterly releases:See Zacks Earnings Calendar.
Neogen’s Segments in Detail
The company's Food Safety segment registered revenues of $159.3 million, marking a 4.2% decrease year over year. Our model projected the segment’s revenues to be $152.3 million for the fiscal first quarter. This consisted of 1.1% core growth, a 0.1% contribution from acquisitions and discontinued product lines and a negative foreign currency impact of 5.4%. The core revenue growth was led by solid performance in biosecurity and indicator testing, culture media & other product categories, including Petrifilm.
Revenues from Animal Safety totaled $57.6 million, down 8.1% year over year. Our model’s projection was $64 million. This consisted of a 7.8% core revenue decline and a 0.3% headwind from discontinued products. On a global basis, the company’s Genomics business experienced a core revenue decline in the mid-single-digit range.
Neogen’s Margin Details
The fiscal first-quarter gross profit declined 10.1% year over year to $104.9 million. The gross margin contracted 263 basis points (bps) to 48.4% despite a 0.2% decrease in the cost of revenues.
Sales and marketing expenses amounted to $45.8 million, almost flat year over year, whereas administrative expenses increased 14.5% from the prior-year quarter to $51.7 million. R&D expenses totaled $5.2 million, down 22.7% year over year. Operating costs totaled $102.7 million, up 5.2% from that reported a year ago. The operating margin fell 732 bps in the quarter under review.
Neogen’s Cash Position
Neogen exited the first quarter with cash and cash equivalents of $120.5 million compared with $170.6 million at the end of fiscal 2024. The company’s non-current liabilities included a total outstanding debt of $900 million and committed borrowing headroom of $150 million.
Neogen Corporation Price, Consensus and EPS Surprise
Neogen Corporation price-consensus-eps-surprise-chart | Neogen Corporation Quote
Neogen’s Full-Year Guidance
Neogen maintained its previously stated financial outlook for fiscal 2025.
The company anticipates full-year revenues to be between $925 million and $955 million. The Zacks Consensus Estimate is currently pegged at $983.2 million.
Capital expenditures are likely to be approximately $85 million, including almost $55 million related to the integration of the former 3M Food Safety Division.
Our Take
Neogen exited the fiscal first quarter on a mixed note, wherein earnings missed the Zacks Consensus Estimate but revenues beat the same. The Animal Safety segment posted lower quarterly sales due to lower sales in animal care & other and biosecurity product categories.
Within Food Safety, core growth was led by Indicator Testing, Culture Media and other product categories, which benefited from strong growth in the Petrifilm product line and Food Quality, Nutritional Analysis and Culture Media. Despite the successful reallocation of the 3M sample collection product line, the company fell short of keeping up with end-user demand, which weighed on the sample collection sales in the quarter.
Additionally, the contraction of both margins in the quarter is discouraging. Foreign currency turned out to be a major headwind.
NEOG’s Zacks Rank and Key Picks
Neogen currently carries a Zacks Rank #4 (Sell).
Some better-ranked stocks from the broader medical space are Addus HomeCare (ADUS - Free Report) , AdaptHealth Corp. (AHCO - Free Report) and Abbott Laboratories, Inc. (ABT - Free Report) .
Addus HomeCare sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here
The company reported a second-quarter adjusted EPS of $1.35, which surpassed the Zacks Consensus Estimate by 12.5%. Revenues of $286.9 million exceeded the Zacks Consensus Estimate by 1.1%. ADUS beat on earnings in each of the trailing four quarters, the average surprise being 11.45%.
AdaptHealth, carrying a Zacks Rank #2 (Buy) at present, reported second-quarter 2024 EPS of $2.11, which surpassed the Zacks Consensus Estimate by 10.5%. Revenues of $806 million topped the consensus estimate by 0.4%. The company’s earnings surpassed estimates in three of the trailing four quarters and missed in one, the average surprise being 40.97%.
Abbott, carrying a Zacks Rank #2 at present, reported second-quarter 2024 EPS of $1.14, which surpassed the Zacks Consensus Estimate by 3.6%. Revenues of $10.38 billion topped the Zacks Consensus Estimate by 0.3%. The company beat on earnings in each of the trailing four quarters, the average surprise being 2.34%.