The chemical company Aceto Corporation (NASDAQ:ACET) failed to meet Wall Street’s expectations on both revenue and profit for the fiscal fourth quarter by a wide margin, hit by competition from generic products.
The Port Washington, New York-based company posted a fiscal fourth-quarter loss of $34.7 million or $0.98 per share, down from a net profit of $2.0 million or $0.06 per share in the year-ago quarter.
On an adjusted basis, its losses came to $0.48 per share while its revenue fell to $168.9 million from $194.6 million in the year-ago quarter.
The results fell short of analysts’ estimates who had expected Aceto to see a loss of $0.04 per share on revenue of $168.95 million.
In response, investors sent Aceto shares down 4.6% to $2.28 before the opening bell on Friday.
“Fourth quarter net sales and gross profit were negatively impacted by sustained generic industry headwinds,” said Aceto CEO William C. Kennally, in a statement.
For the full year, the company swung to a loss of $316.1 million or $8.98 per share, which included an impairment charge of $256.3 million and a valuation allowance on net US deferred tax assets of $76.5 million. Its revenue came in at $711.4 million.
Aceto’s board has authorized the introduction of a strategic review and it does not plan to make any further announcement on this matter until a transaction has been approved.
Sales from the company’s Human Health segment, which consists of generic and over-the-counter drugs and materials for nutritional supplements, came to $73.1 million in the quarter, a fall of 36% compared to $113.7 million in the fourth quarter of 2017.
Sales from pharmaceutical Ingredient sales amounted to $45.4 million, a jump of 25.6%, compared to $36.2 million in the fourth quarter of fiscal 2017.
Aceto sells generic prescription products and over-the-counter pharmaceutical products under its Rising label to wholesalers, chain drug stores and distributors. Aceto also supplies the raw materials used in the production of nutritional supplements, including vitamins, amino acids, iron compounds and biochemicals.