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Neogen (NEOG) Q4 Earnings and Revenues Increase Y/Y
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Neogen Corp (NEOG - Free Report) reported adjusted earnings of 26 cents per share in the fourth quarter of fiscal 2016. The figure was in line with the Zacks Consensus Estimate and increased 4% from the year-ago quarter.
Revenues increased 14.6% on a year-over-year basis to $90 million, which beat the Zacks Consensus Estimate of $86 million.
In fiscal 2016, Neogen reported earnings of 97 cents per share on sales of $353.7 million. Notably, earnings increased almost 7.7%, whereas sales surged 13.5% when compared with fiscal 2016 figures.
Revenues at Neogen’s food safety segment increased 11% in fiscal 2016, with overall organic growth of 6%. The company reported revenues of $39.5 million for the quarter, an increase of 11% from the year-ago quarter.
This was mainly driven by high sales of food allergen tests (up 20% for the fiscal), AccuPoint advanced sanitation monitoring system products (up 18%), test kits for Listeria (up 14%). Sales of the mycotoxin test ended flat in the full year with the 2015 levels.
Other key drivers in the food safety segment were development of NeoSEEK (pathogen detection and identification technology), signing of the Food Safety Modernization Act for recalls and increasing demand from the emerging markets of the U.S. and in the European Union.
The animal safety segment recorded revenues of $50.5 million, an increase of 17.5% from the year-ago quarter. The growth at the segment was mainly driven by sales of the company's rodent control products (up 50% for the year). Notably, Neogen’s portfolio of biologics segment in the animal safety unit includes BotVax, the only available vaccine for equine botulism that ensured the company’s exclusivity in the market.
The genomics business unit had an impressive performance as it recorded a 22% surge in sales for fiscal 2016 compared to fiscal 2015. The remarkable DNA chip technology proprietorship and increased canine testing procedures led to this growth in the genomics unit.
Notably, for the fourth quarter, the overall organic growth for the company was 10%, for food safety segment was 6.4% and for animal safety segment was 13.4%.
Globally, Brazil sales grew 49% while Latin America sales increased by 44%. In fact, China operations strengthened considerably during the past year, with a revenue increase of 86%.
Margin Details
Adjusted gross margin contracted 150 basis points (bps) to 46.5% in the quarter, primarily due to unfavorable product mix as well as adverse currency exchange rate
Adjusted EBITDA increased 32.7% to $3711 in the reported quarter.
Operating expenses, as a percentage of revenues, decreased 20 bpsin the reported quarter. As a result, operating margin contracted 130 bps from the year-ago quarter.
Acquisitions
Neogen completed five acquisitions in the year for $42.5 million.
Our take
We believe that accretive acquisitions and expanding international footprint will drive Neogen’s overall results in fiscal 2017. Moreover, the company has a broad portfolio of innovative disinfectant products and more than 100 EPA and FDA-registered products, which strengthen the company’s market position globally.
Zacks Rank and Key Picks
Currently, Neogen carries a Zacks Rank #3 (Hold).
Better-ranked stocks in the medical space are Boston Scientific Corporation (BSX - Free Report) , NuVasive Inc and Nxstage Medical Inc. . All the stocks sport a Zacks Rank #1 (Strong Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>
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Neogen (NEOG) Q4 Earnings and Revenues Increase Y/Y
Neogen Corp (NEOG - Free Report) reported adjusted earnings of 26 cents per share in the fourth quarter of fiscal 2016. The figure was in line with the Zacks Consensus Estimate and increased 4% from the year-ago quarter.
Revenues increased 14.6% on a year-over-year basis to $90 million, which beat the Zacks Consensus Estimate of $86 million.
In fiscal 2016, Neogen reported earnings of 97 cents per share on sales of $353.7 million. Notably, earnings increased almost 7.7%, whereas sales surged 13.5% when compared with fiscal 2016 figures.
Segment Details
Revenues at Neogen’s food safety segment increased 11% in fiscal 2016, with overall organic growth of 6%. The company reported revenues of $39.5 million for the quarter, an increase of 11% from the year-ago quarter.
This was mainly driven by high sales of food allergen tests (up 20% for the fiscal), AccuPoint advanced sanitation monitoring system products (up 18%), test kits for Listeria (up 14%). Sales of the mycotoxin test ended flat in the full year with the 2015 levels.
NEOGEN CORP Price, Consensus and EPS Surprise
NEOGEN CORP Price, Consensus and EPS Surprise | NEOGEN CORP Quote
Other key drivers in the food safety segment were development of NeoSEEK (pathogen detection and identification technology), signing of the Food Safety Modernization Act for recalls and increasing demand from the emerging markets of the U.S. and in the European Union.
The animal safety segment recorded revenues of $50.5 million, an increase of 17.5% from the year-ago quarter. The growth at the segment was mainly driven by sales of the company's rodent control products (up 50% for the year). Notably, Neogen’s portfolio of biologics segment in the animal safety unit includes BotVax, the only available vaccine for equine botulism that ensured the company’s exclusivity in the market.
The genomics business unit had an impressive performance as it recorded a 22% surge in sales for fiscal 2016 compared to fiscal 2015. The remarkable DNA chip technology proprietorship and increased canine testing procedures led to this growth in the genomics unit.
Notably, for the fourth quarter, the overall organic growth for the company was 10%, for food safety segment was 6.4% and for animal safety segment was 13.4%.
Globally, Brazil sales grew 49% while Latin America sales increased by 44%. In fact, China operations strengthened considerably during the past year, with a revenue increase of 86%.
Margin Details
Adjusted gross margin contracted 150 basis points (bps) to 46.5% in the quarter, primarily due to unfavorable product mix as well as adverse currency exchange rate
Adjusted EBITDA increased 32.7% to $3711 in the reported quarter.
Operating expenses, as a percentage of revenues, decreased 20 bpsin the reported quarter.
As a result, operating margin contracted 130 bps from the year-ago quarter.
Acquisitions
Neogen completed five acquisitions in the year for $42.5 million.
Our take
We believe that accretive acquisitions and expanding international footprint will drive Neogen’s overall results in fiscal 2017.
Moreover, the company has a broad portfolio of innovative disinfectant products and more than 100 EPA and FDA-registered products, which strengthen the company’s market position globally.
Zacks Rank and Key Picks
Currently, Neogen carries a Zacks Rank #3 (Hold).
Better-ranked stocks in the medical space are Boston Scientific Corporation (BSX - Free Report) , NuVasive Inc and Nxstage Medical Inc. . All the stocks sport a Zacks Rank #1 (Strong Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>