A month has gone by since the last earnings report for Catalent (CTLT Quick QuoteCTLT - Free Report) . Shares have lost about 3.4% in that time frame, outperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Catalent due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.

Catalent Q2 Earnings Top Estimates, FY22 View Up

Catalent reported second-quarter fiscal 2022 adjusted earnings per share of 90 cents, up 42.9% year over year. The bottom line exceeded the Zacks Consensus Estimate by 7.1%.

The adjustments include charges and benefits related to amortization, as well as acquisition, integration and other special items’ costs.

The company’s GAAP earnings per share was 52 cents in the quarter, up 15.6% year over year.

Revenues in Detail

Revenues grossed $1.22 billion in the reported quarter, up 33.6% year over year. The metric surpassed the Zacks Consensus Estimate by 5.1%.

At constant exchange rate or CER, revenues were up 35%.

The top line was driven by robust performances by majority of the segments in the reported quarter.

Organic net revenues (excluding the impact of acquisitions, divestitures and currency translation) increased 32% year over year.

Segments in Detail

Revenues in the Biologics segment rose 57.9% year over year (up 60% at CER) to $638 million in the quarter under review.

Revenues in the Softgel and Oral Technologies segment increased 33.2% from the year-ago period’s levels (up 36% at CER) to $329 million.

The Oral and Specialty Delivery arm recorded revenues of $156 million, down 8.2% and 8% on a reported basis and at CER, respectively, year over year.

Revenues in the Clinical Supply Services business rose 6.5% year over year (up 7% at CER) to $99 million.

Operational Update

In the quarter under review, Catalent’s gross profit rose 35.9% to $405 million. Gross margin expanded 57 basis points (bps) to 33.3%.

Selling, general and administrative expenses rose 38.2% to $228 million year over year.

Adjusted operating profit totaled $177 million, rising 33.1% from the prior-year quarter’s levels. Adjusted operating margin in the quarter contracted by 6 bps to 14.5%.

Financial Update

Catalent exited the second quarter of fiscal 2022 with cash and cash equivalents of $849 million compared with $1.97 billion at the end of fiscal first quarter. Total debt at the end of the fiscal second quarter was $4.22 billion compared with $4.30 billion at the end of fiscal first quarter.

Cumulative net cash provided by operating activities at the end of second-quarter fiscal 2022 was $232 million compared with $224 million a year ago.

FY22 Guidance

Catalent has raised its earlier-provided financial outlook for the year.

The company projects revenues within $4,740 million-$4,860 million for the full year, up from the previous projection of $4,620 million-$4,820 million. The Zacks Consensus Estimate for fiscal 2022 revenues is currently pegged at $4.72 billion.

How Have Estimates Been Moving Since Then?

It turns out, fresh estimates flatlined during the past month.

VGM Scores

At this time, Catalent has an average Growth Score of C, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Catalent has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.