Avantor, Inc. (NYSE:AVTR) shares plunged 14% on Wednesday after the life sciences tools provider fell short of Wall Street expectations in the third quarter and announced a major non-cash goodwill impairment charge tied to its distribution business.
The company reported adjusted earnings of $0.22 per share, slightly below the $0.23 analyst estimate, while revenue dropped 5.3% year-over-year to $1.62 billion, missing the $1.65 billion consensus forecast. On an organic basis, sales were down 4.7% from the prior year.
Avantor’s results were weighed down by a $785 million goodwill impairment charge related to its Distribution reporting unit, resulting in a GAAP net loss of $711.8 million, or $1.04 per share. The company attributed the write-down to challenging market conditions and weaker financial performance in recent quarters.
“To position Avantor for success in any macroeconomic environment, we are making decisive, meaningful changes aimed at improving execution, accountability and financial performance,” said Emmanuel Ligner, President and Chief Executive Officer.
“I strongly believe in Avantor’s growth and profitability potential, and this conviction is reflected in the new $500 million share repurchase program our Board has authorized.”
By segment, Laboratory Solutions revenue declined 6.4% to $1.1 billion, with a 4.9% organic decrease, while Bioscience Production revenue slipped 2.9% to $527.3 million, or 4.3% organically.
Despite the soft quarter, Avantor generated $207.4 million in operating cash flow and $171.7 million in free cash flow. Adjusted EBITDA came in at $267.9 million, with a margin of 16.5%, compared to 17.6% a year earlier.
The announcement of a $500 million share repurchase program underscored management’s confidence in future cash flow generation and commitment to delivering shareholder value amid near-term headwinds.