Neogen Sees Q3 EPS Drop to $0.04, Revenue Down 7.5%, Genomics Sale Boosts Shares
Neogen forecasts Q3 EPS of $0.04 versus $0.10 last year and revenue of $204.5M, down 7.5% year-over-year, with results due April 9. Its Genomics business sale to Zoetis lifted shares 1.6% to $9.56 and spurred a neutral rating with a $10 price target.
1. Q3 Earnings Expectations
Neogen projects third-quarter earnings per share of $0.04, down from $0.10 a year earlier, with results scheduled for release on April 9. The decline in EPS reflects pressure on profit margins and the competitive landscape for food and animal safety products.
2. Revenue Projections and Trends
Revenue for the quarter is estimated at $204.5 million, a 7.5% decrease from $220.98 million in the prior year. This downturn in top-line performance underscores softer demand across key markets and heightens scrutiny on management’s ability to restore growth.
3. Genomics Business Sale
The divestiture of Neogen’s Genomics business to Zoetis generated a 1.6% uptick in share price to $9.56. This strategic exit is intended to sharpen focus on core food and animal safety segments while freeing up capital for reinvestment.
4. Financial Health and Analyst Outlook
Neogen maintains a conservative debt-to-equity ratio of 0.38 and a current ratio of 3.91, indicating robust liquidity. Following the Genomics sale, the company received a neutral rating with a $10 price target, reflecting cautious optimism on near-term earnings.