Neogen Corporation (NASDAQ:NEOG) jumped 12.20% in premarket trading on Thursday after reporting stronger-than-expected fiscal first-quarter results, overcoming persistent operational challenges.
The food and animal safety company posted adjusted earnings of $0.04 per share for the quarter ended August 31, well above the analyst consensus of -$0.07. Revenue totaled $209.2 million, beating expectations of $202.43 million. Although revenue fell 3.6% from $217 million in the same period last year, the company managed to deliver a core revenue increase of 0.3% after excluding currency and divestiture impacts.
Gross margin narrowed to 45.4% from 48.4% a year earlier, largely due to integration-related expenses tied to the relocation of sample collection product manufacturing.
“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.”
To improve profitability and fund growth initiatives, Neogen has rolled out cost-reduction measures, including workforce cuts. The company also completed the sale of its Cleaners & Disinfectants business during the quarter and applied the proceeds to repay $100 million in debt.
Neogen reaffirmed its full-year guidance, expecting revenue between $820 million and $840 million, slightly above the consensus of $819.1 million. Adjusted EBITDA is projected in the range of $165 million to $175 million.
By segment, Food Safety revenue slipped 4.6% to $152.1 million, while Animal Safety revenue dipped 0.8% to $57.1 million. Meanwhile, the company’s Genomics business returned to positive core growth, posting gains in the mid-single digits.
Neogen Corporation stock price
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