Neogen's Raised Outlook Fuels Turnaround Hopes, Stock Soars

Core Insights - Neogen Corp. reported better-than-expected second-quarter financial results, with adjusted earnings of 10 cents per share, surpassing the consensus estimate of 6 cents [1] - Sales for the second quarter were $224.69 million, a decrease of 2.8% year over year, but exceeded the consensus of $207.85 million, with core revenue increasing by 2.9% [1] Financial Performance - Gross margin for the second quarter was 47.5%, down from 49.0% a year ago, primarily due to tariff costs, inventory write-offs, and a negative impact from product mix [3] - Adjusted EBITDA was $48.7 million, with a margin of 21.7%, compared to $51.4 million and a margin of 22.2% in the prior-year period [3] Segment Performance - The Food Safety segment generated revenue of $165.6 million, reflecting a 0.8% year-over-year increase, driven by growth in Indicator Testing and Culture Media [4] - The Animal Safety segment reported revenue of $59.1 million, a decline of 11.8%, impacted by lower sales of needles and syringes in the Veterinary Instruments & Disposables category [5] Outlook - Neogen raised its fiscal 2026 sales guidance from $820 million-$840 million to $845 million-$855 million, exceeding the consensus of $823.30 million [6] - The company expects adjusted EBITDA to be approximately $175 million, compared to the prior range of $165 million to $175 million [6] - Capital expenditures are expected to total approximately $50 million [6] Market Reaction - Neogen shares rose by 29.34% to $9.54 at the time of publication [7]