What happened
Shares of Neogen Corporation(NASDAQ: NEOG) were down more than 16% for the week, according to data provided by S&P Global Market Intelligence. The healthcare company, which specializes in food and animal safety solutions, saw its stock close last week at $23.33. It then fell to as low as $20.22 on Thursday after Neogen released preliminary fiscal 2024 first-quarter numbers. The stock is still up more than 27% this year.
So what
The company announced, in an investor presentation at the Wells Fargo 2023 Healthcare Conference in Boston, that it is expecting fiscal 2024 first-quarter revenue to be slightly below expectations.
Neogen CEO John Adent said that the company's revenue "came in a little lighter than we'd thought." Animal safety revenue is expected to fall by high-single-digit percentages, due to softer genomic sales. While its legacy food safety business was expected to rise in the mid-single digits, the company saw revenue flat from its 3M food safety business mainly due to a weakness in business in China and in Asia overall, tied to supply constraints.
Now what
The company traditionally has had a slow first quarter, so the lower numbers aren't a huge cause for concern. Neogen had a better fourth quarter. While revenue was reported as $241.8 million, up 72.6% year over year in the fourth quarter, net income was $5.6 million, compared to $14.9 million in the same period last year. Earnings per share (EPS) was $0.03 compared to $0.14 in the fourth quarter of fiscal 2022. The company said it is waiting for business to pick up once its clients run though what is considered a backlog of inventory.
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Wells Fargo is an advertising partner of The Ascent, a Motley Fool company. Jim Halley has positions in 3M. The Motley Fool recommends 3M. The Motley Fool has a disclosure policy.
