Neogen Corporation (NASDAQ:NEOG) shares fell ahead of the opening bell on Tuesday after the specialist in food safety solutions reported a rise in first-quarter revenue but a decline in earnings, with both measures missing analysts’ forecasts.
The company, which acquired 3M's former food-safety division a year ago, posted a 73% rise in revenue to $229 million, falling short of the $231.8 million consensus forecast of three analysts surveyed by Zacks Investment Research.
Adjusted earnings per share amounted to $0.11, down from $0.16 a year earlier and below the $0.14 expected by analysts.
The company noted that its legacy Food Safety business performed well, particularly in its core product lines of allergen, natural toxin and microbiological testing.
As expected by the company, the Animal Safety business experienced continued destocking, with channel inventory levels reaching multi-year lows.
“Pro forma growth in the former 3M Food Safety Division was low, impacted by the strong fourth quarter that saw us catch up on fulfillment and also by weakness in China, but the progress we made last quarter on Petrifilm supply at our transition manufacturing partner was sustained and initial demand in the second quarter has been encouraging,” the company’s president and CEO John Adent commented in a statement.
“Our teams are leveraging this supply continuity, as well as the broader Neogen product portfolio, in targeted demand-generation initiatives."
Adent continued: "We made significant progress in the quarter across a number of fronts related to the integration of the former 3M Food Safety division, moving closer to full autonomy of that business within the One Neogen we are building.”
The company has guided for full-year revenue of $955 million to $985 million.
Its shares were down 3.3% at $16.96 in Tuesday pre-market trading.
Contact the author at stephen.gunnion@proactiveinvestors.com