Avantor Stock Declines Despite Q4 Earnings Beat, Margins Expand

Core Insights - Avantor, Inc. reported fourth-quarter 2024 adjusted earnings per share (EPS) of 27 cents, an 8% increase year-over-year, surpassing the Zacks Consensus Estimate by 8% [1] - The company experienced a decline in revenues, with fourth-quarter revenues at $1.69 billion, down 2.1% year-over-year, missing the Zacks Consensus Estimate by 1.5% [3] - Full-year 2024 EPS was reported at 99 cents, reflecting a 6.6% decrease from the previous year [2] Revenue and Segment Analysis - The Laboratory Solutions segment's net sales were$ 1.13 billion, a decrease of 4.8% year-over-year, with organic sales down 0.9% [4] - Bioscience Production's net sales increased by 3.8% to $560.8 million, with organic sales up 4.1% year-over-year [6] - Full-year 2024 revenues totaled$ 6.78 billion, a 2.6% decline from 2023 [3] Margin and Financial Position - Gross profit for the quarter declined 1.3% to $562.9 million, but gross margin expanded by 27 basis points to 33.4% [8] - Adjusted operating profit increased by 4.5% to$ 191.5 million, with an adjusted operating margin of 11.4% [9] - At the end of 2024, Avantor had cash and cash equivalents of $261.9 million and total debt of$ 4.06 billion [10] Guidance and Future Outlook - For 2025, Avantor projects organic revenue growth of 1-3%, with low-single-digit growth in the Laboratory Solutions segment and mid-single-digit growth in Bioscience Production [12] - The company expects adjusted EPS for 2025 to be between $1.02 and$ 1.10, indicating a 10% increase from 2024 [13] Strategic Developments - Avantor launched a new service offering aimed at addressing capacity challenges for large pharma and biotech customers, utilizing digital tools and generative AI [15] - The company signed new third-party supplier agreements and completed the installation of an enhanced solutions manufacturing facility in Gliwice, Poland, to meet growing demand in the biopharma market [16][17]