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NEOG Prelim Q2 Earnings Meet, '25 Sales View Down, Stock Falls
NEOGNeogen(NEOG) ZACKS·2025-01-15 14:01

Core Insights - Neogen Corporation (NEOG) reported preliminary second-quarter fiscal 2025 adjusted earnings per share (EPS) of 11 cents, matching the Zacks Consensus Estimate and the previous year's figures [1][2] - The company's stock fell 5.4% to 12.36followingtheearningsannouncement[2]RevenuePerformance−PreliminaryrevenuesforQ2increasedby0.712.36 following the earnings announcement [2] Revenue Performance - Preliminary revenues for Q2 increased by 0.7% year-over-year to 231.3 million, with core revenues rising by 3.5% [3] - The revenue growth was negatively impacted by acquisitions and discontinued product lines by 0.3% and foreign currency fluctuations by 2.5% [3] Segment Analysis - The Food Safety segment reported revenues of 164.2million,aslightdecreaseof0.1164.2 million, a slight decrease of 0.1% year-over-year, with core growth of 3.6% [4] - The Animal Safety segment saw revenues of 67.0 million, up 2.8% year-over-year, driven by core growth of 3.2% [5] Margin and Expense Details - Gross profit for Q2 declined by 2.9% year-over-year to 113.3million,withgrossmargincontractingby185basispointsto49113.3 million, with gross margin contracting by 185 basis points to 49% due to a 4.5% increase in the cost of revenues [6] - Sales and marketing expenses rose by 3.8% to 46.5 million, while administrative expenses increased by 11.7% to 57.8million[7]CashPositionandLiabilities−Neogen′scashandcashequivalentsstoodat57.8 million [7] Cash Position and Liabilities - Neogen's cash and cash equivalents stood at 140.2 million at the end of Q2, up from 120.5millionattheendofQ1[8]−Thecompanyhastotaloutstandingdebtof120.5 million at the end of Q1 [8] - The company has total outstanding debt of 900 million and a committed borrowing headroom of 150million[8]FinancialOutlook−Neogenupdateditsfull−yearrevenueguidanceforfiscal2025toarangeof150 million [8] Financial Outlook - Neogen updated its full-year revenue guidance for fiscal 2025 to a range of 905 million to 925million,downfromthepreviousestimateof925 million, down from the previous estimate of 925 million to 955million[9]−ThecurrentZacksConsensusEstimateforfull−yearrevenuesis955 million [9] - The current Zacks Consensus Estimate for full-year revenues is 935.06 million [9] Operational Challenges - The Food Safety segment faced challenges in sample collection and natural toxins, impacting sales despite efforts to reallocate the 3M sample collection product line [12] - Margin contractions and foreign currency fluctuations were noted as significant headwinds for the company [13]