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LANSING, Mich. - On Thursday, Neogen Corporation (NASDAQ:NEOG) reported first-quarter results that exceeded analyst expectations, despite ongoing challenges in its business operations.
The food and animal safety company’s shares surged 12.20% in pre-market trading after the results.
The company posted adjusted earnings of $0.04 per share for the quarter ended August 31, significantly beating the analyst consensus estimate of -$0.07. Revenue came in at $209.2 million, surpassing the expected $202.43 million, though it represented a 3.6% decrease from $217 million in the same period last year.
Core revenue, which excludes the impacts of foreign currency translation and divestitures, increased by a modest 0.3%. The company’s gross margin fell to 45.4% from 48.4% a year ago, primarily due to integration-related costs associated with relocated production of sample collection products.
"I see tremendous opportunity ahead to leverage Neogen’s strong, longstanding leadership in food and animal safety," said Mike Nassif, Neogen’s newly appointed CEO and President. "Recent performance has been hampered by execution challenges which we are tackling head-on with a sharpened emphasis on commercial excellence, renewed innovation and a leaner cost structure."
The company recently implemented cost-cutting initiatives, including workforce reductions, to improve margins and enable strategic reinvestment. During the quarter, Neogen completed the divestiture of its Cleaners & Disinfectants business and used the proceeds to repay $100 million of debt.
Neogen reaffirmed its full-year outlook, projecting revenue between $820 million and $840 million, above the consensus estimate of $819.1 million. Adjusted EBITDA is expected to range from $165 million to $175 million.
The company’s Food Safety segment saw a 4.6% revenue decline to $152.1 million, while Animal Safety revenue decreased 0.8% to $57.1 million. On a positive note, Neogen’s Genomics business returned to positive core revenue growth in the mid-single-digit range.
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