Neogen Co., Ltd. (Neog – Free Report) reported earnings per share of $1.15 for the second quarter of fiscal 2023, down 21.1% from the same period last year. However, the figure beats Zach’s consensus estimate by a staggering 287.5%.
Second quarter revenue increased 76.2% year-over-year to $230 million, beating Zacks Consensus Estimate by 0.9%. The second quarter was his 122nd of the last 128 quarters in which Neogen reported year-over-year revenue growth.
Segment details
Neogen registered food safety sales of $161.3 million in the second quarter. This reflects 140.3% year-on-year growth driven by 6.3% core growth and 140.5% acquisitions. Core growth was driven by cultural media and other categories where the company’s Petrifilm product line performed well.
Animal Safety revenues were $68.7 million in the second quarter of the fiscal year, an increase of 8.4% year-over-year. This comprises his 6.9% of core growth and his 2.4% from acquisitions. The primary growth was driven by NEOG’s biosecurity product portfolio, driven primarily by increased share of the animal protein market, dairy hygiene products, and sales of new insect control products.
Revenues from Neogen’s animal genomics business increased 7.9% year-over-year in the second quarter. International sales increased 5.5% year-over-year or on a core basis, and accounted for his 50.3% of total Neogen sales in the reported quarter.
margin details
Neogen’s second quarter gross profit increased 85.7% year-over-year to $112.5 million. Gross margin increased 250 basis points to 48.9%.
Sales and marketing expenses increased 71.5% to $36.3 million and administrative expenses increased 240.6% year-over-year to $77 million. Research and development expenses of $6.8 million increased 58% from the prior year period. Operating costs totaled $120.2 million, up 149.8% year-over-year.
Neogen Corporation Price, Consensus, EPS Surprise
cash position
Neogen ended the quarter with cash and investments of $276.3 million, down from $374.7 million at the end of the first quarter. The company had no debt on its balance sheet at the end of the quarter.
our view
Neogen Ends Second Quarter of Fiscal Year 2023 with Earnings and Earnings Better than Expected. The company posted sales growth across its food safety and animal safety segments. Sales in the rodent control/insect repellent/disinfectant category were strong. This is due to increased share of the animal protein market, sales of dairy hygiene products and the introduction of new insect control products.
Veterinary Instruments and Disposables category revenues were up mid-single digits on a core basis. The rise was driven by strong market demand and additional sales to large retail customers.
In addition, global Coagenomics revenues increased in the high single digits driven by strong demand in the US, European and Australian beef markets. Gross margin expansion is an added benefit.
However, a decline in operating profit due to higher operating costs does not bode well. Ongoing supply chain disruptions and inflationary pressures continue to pose challenges for the company.
Future release
Below are medical stocks that are scheduled to report in the near future.
AMN Healthcare Service Co., Ltd. (AMNMore – Free Report will release its third quarter 2022 results on February 16.
The long-term growth rate is estimated at 3.3%. AMN’s earnings have beaten Zacks consensus forecasts in all four quarters, averaging 10.9%.
Boston Scientific Corporation (BSX – Free Report) will release its Q4 2022 results on February 1.
The long-term growth rate is estimated at 10.3%. BSX’s earnings averaged 1.9%, out of the last four quarters he beat expectations in three and underperformed in one.
Medical Systems Co., Ltd. (MMSI – Free Report) will release results for the fourth quarter of 2022 on February 23.
The long-term growth rate is estimated at 11%. MMSI earnings have beaten expectations in all four quarters, averaging 25.4%.
