Neogen Corporation NEOG reported first-quarter fiscal 2025 adjusted earnings per share (EPS) of 7 cents, down 36.4% from the prior-year quarter's registered numbers. The bottom line missed the Zacks Consensus Estimate by 30%.

Revenues fell 5.2% on a year-over-year basis to $217 million. Core revenues declined 1.4%. Acquisitions and discontinued product lines did not impact core growth, while foreign currency had a negative impact of 3.9%. However, the metric surpassed the Zacks Consensus Estimate by 0.4%.

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Neogen’s Segments in Detail

The company's Food Safety segment registered revenues of $159.3 million, marking a 4.2% decrease year over year. Our model projected the segment’s revenues to be $152.3 million for the fiscal first quarter. This consisted of 1.1% core growth, a 0.1% contribution from acquisitions and discontinued product lines and a negative foreign currency impact of 5.4%. The core revenue growth was led by solid performance in biosecurity and indicator testing, culture media & other product categories, including Petrifilm.

Revenues from Animal Safety totaled $57.6 million, down 8.1% year over year. Our model’s projection was $64 million. This consisted of a 7.8% core revenue decline and a 0.3% headwind from discontinued products. On a global basis, the company’s Genomics business experienced a core revenue decline in the mid-single-digit range.

Neogen’s Margin Details

The fiscal first-quarter gross profit declined 10.1% year over year to $104.9 million. The gross margin contracted 263 basis points (bps) to 48.4% despite a 0.2% decrease in the cost of revenues.

Sales and marketing expenses amounted to $45.8 million, almost flat year over year, whereas administrative expenses increased 14.5% from the prior-year quarter to $51.7 million. R&D expenses totaled $5.2 million, down 22.7% year over year. Operating costs totaled $102.7 million, up 5.2% from that reported a year ago. The operating margin fell 732 bps in the quarter under review.

Neogen’s Cash Position

Neogen exited the first quarter with cash and cash equivalents of $120.5 million compared with $170.6 million at the end of fiscal 2024. The company’s non-current liabilities included a total outstanding debt of $900 million and committed borrowing headroom of $150 million.

Neogen Corporation Price, Consensus and EPS Surprise

Neogen Corporation price-consensus-eps-surprise-chart | Neogen Corporation Quote

Neogen’s Full-Year Guidance

Neogen maintained its previously stated financial outlook for fiscal 2025.