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In the last-reported quarter, the company’s earnings of $1.19 per share surpassed the Zacks Consensus Estimate by 3.5%. Over the trailing four quarters, its earnings outperformed the Zacks Consensus Estimate on all occasions, delivering an earnings surprise of 7.2%, on average.
Let’s see how things have shaped up prior to this announcement:
Factors to Note
Biologics Business
Per Catalent’s fiscal 2022 fourth-quarter earnings update in August, its Biologics segment has been witnessing strength over the past few months on the back of a broad base of service offerings within its biologics segment. This includes the increased demand for Catalent’s customer prescription products and a rebound in demand for its consumer products. The increased demand in Catalent’s cell and gene therapy, drug product and drug substance offerings, which has been registered over the past few months, is likely to have continued in the fiscal 2023 first quarter, thereby driving up the quarterly revenues.
However, lower revenues from its COVID-19-related programs over the past few months are likely to have weighed on Catalent’s fiscal first-quarter revenues.
During the fiscal 2022 fourth-quarter earnings call, the company confirmed that it has been benefiting from factors like its new drug substance lines in Madison and drug product lines in Bloomington in Europe and its cell therapy and plasmid offerings in Europe and the United States. This is also expected to be an important top-line driver in the fiscal 2023 first quarter.
Catalent is likely to have benefited from its European drug product space, courtesy of its facility in Limoges, France, which it completed in March. The project completion was expected to convert the site into a European center of excellence for biopharmaceutical development, drug product fill/finish services and packaging. This is also likely to have driven its fiscal first-quarter revenues.
Catalent is also expected to have derived benefits from its UpTempo Virtuoso platform process (introduced in May), which is likely to have significantly driven its revenues in the to-be-reported quarter.
Catalent is also likely to have continued to benefit from robust contributions by its commercial-scale viral vector manufacturing suites, as well as by associated support facilities and services at its gene therapy campus in Harmans, MD. The company’s segmental revenues are also likely to be aided by its high-speed syringe filling line. These developments are likely to have contributed to segmental revenues of the to-be-reported quarter.
The Zacks Consensus Estimate for fiscal first-quarter Biologics revenues is pegged at $532 million, suggesting a decline of 2.6% from the year-ago quarter’s reported figure.
Pharma and Consumer Health
In September, Catalent had announced a $2.2 million expansion to its clinical supply facility in Singapore. The investment is expected to increase the site’s footprint and allow the installation of 35 new freezers for ultra-low temperature (ULT) storage. The expansion will likely add specialized secondary packaging capabilities for ULT products, thereby improving its operational efficiencies.
The same month, Catalent signed a drug development agreement with Awakn Life Sciences Corp. to optimize the development, launch and supply of better patient treatments across multiple modalities.
Catalent, in August, announced that it will be acquiring Metrics Contract Services, a full-service specialty Contract Development and Manufacturing Organization from Mayne Pharma Group Limited. In July, Catalent entered into a manufacturing agreement with Xenetic Biosciences, Inc. which will include cGMP (current good manufacturing practices) manufacturing for the latter’s recombinant protein, Human DNase I. These developments raise our optimism about the stock.
Catalent is also likely to have benefited from the expansion of its primary packaging capabilities at its clinical supply facility in Shiga, Japan (June). The same month, Catalent had entered into a development agreement with MigVax to leverage its proprietary Zydis Bio orally disintegrating tablet technology for delivering the MigVax-101 vaccine.
In April, Catalent had announced its completion of a significant expansion of its nasal capabilities at its Morrisville, Research Triangle Park, NC, facility to provide improved services for developing and manufacturing unit and bi-dose nasal spray products. The same month, the company announced its completion of the installation and commissioning of four new high-throughput high-bay cGMP manufacturing suites at its facility in Kansas City, MO. These are likely to have contributed to the segment’s revenue in the to-be-reported quarter.
The Estimate Picture
For first-quarter fiscal 2023, the Zacks Consensus Estimate for total revenues of $1.06 billion implies an improvement of 3.9% from the prior-year quarter’s reported figure.
The consensus estimate for earnings is pegged at 55 cents per share, implying a decline of 22.5% from the prior-year quarter’s reported number.
What Our Model Suggests
Per our proven model, a stock with a Zacks Rank #1 (Strong Buy), #2 (Buy) or #3 (Hold), along with a positive Earnings ESP, has higher chances of beating estimates. This is not the case here, as you can see:
Earnings ESP: Catalent has an Earnings ESP of +3.74%. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Zacks Rank: The company currently carries a Zacks Rank #5 (Strong Sell).
Stocks Worth a Look
Here are a few medical stocks worth considering, as these have the right combination of elements to beat on earnings this reporting cycle.
McKesson Corporation (MCK - Free Report) has an Earnings ESP of +0.27% and a Zacks Rank of 2. MCK has an estimated long-term growth rate of 10.1%.
Nevro Corp. (NVRO - Free Report) has an Earnings ESP of +10.91% and is a Zacks #2 Rank stock. NVRO has an estimated growth rate of 23.3% for 2022.
Nevro’s earnings surpassed estimates in two of the trailing four quarters, missed the same in one and matched in the other, with the average surprise being 5.7%.
GoodRx Holdings, Inc. (GDRX - Free Report) has an Earnings ESP of +21.62% and carries a Zacks Rank of 2 at present. GDRX has an estimated long-term growth rate of 16.4%.
GoodRx’s earnings surpassed estimates in three of the trailing four quarters and missed the same in one, with the average surprise being 19.4%.
Image: Bigstock
Catalent (CTLT) to Report Q1 Earnings: What's in the Cards?
Catalent, Inc. (CTLT - Free Report) is scheduled to report first-quarter fiscal 2023 results on Nov 1, before market open.
In the last-reported quarter, the company’s earnings of $1.19 per share surpassed the Zacks Consensus Estimate by 3.5%. Over the trailing four quarters, its earnings outperformed the Zacks Consensus Estimate on all occasions, delivering an earnings surprise of 7.2%, on average.
Let’s see how things have shaped up prior to this announcement:
Factors to Note
Biologics Business
Per Catalent’s fiscal 2022 fourth-quarter earnings update in August, its Biologics segment has been witnessing strength over the past few months on the back of a broad base of service offerings within its biologics segment. This includes the increased demand for Catalent’s customer prescription products and a rebound in demand for its consumer products. The increased demand in Catalent’s cell and gene therapy, drug product and drug substance offerings, which has been registered over the past few months, is likely to have continued in the fiscal 2023 first quarter, thereby driving up the quarterly revenues.
However, lower revenues from its COVID-19-related programs over the past few months are likely to have weighed on Catalent’s fiscal first-quarter revenues.
During the fiscal 2022 fourth-quarter earnings call, the company confirmed that it has been benefiting from factors like its new drug substance lines in Madison and drug product lines in Bloomington in Europe and its cell therapy and plasmid offerings in Europe and the United States. This is also expected to be an important top-line driver in the fiscal 2023 first quarter.
Catalent, Inc. Price and EPS Surprise
Catalent, Inc. price-eps-surprise | Catalent, Inc. Quote
Catalent is likely to have benefited from its European drug product space, courtesy of its facility in Limoges, France, which it completed in March. The project completion was expected to convert the site into a European center of excellence for biopharmaceutical development, drug product fill/finish services and packaging. This is also likely to have driven its fiscal first-quarter revenues.
Catalent is also expected to have derived benefits from its UpTempo Virtuoso platform process (introduced in May), which is likely to have significantly driven its revenues in the to-be-reported quarter.
Catalent is also likely to have continued to benefit from robust contributions by its commercial-scale viral vector manufacturing suites, as well as by associated support facilities and services at its gene therapy campus in Harmans, MD. The company’s segmental revenues are also likely to be aided by its high-speed syringe filling line. These developments are likely to have contributed to segmental revenues of the to-be-reported quarter.
The Zacks Consensus Estimate for fiscal first-quarter Biologics revenues is pegged at $532 million, suggesting a decline of 2.6% from the year-ago quarter’s reported figure.
Pharma and Consumer Health
In September, Catalent had announced a $2.2 million expansion to its clinical supply facility in Singapore. The investment is expected to increase the site’s footprint and allow the installation of 35 new freezers for ultra-low temperature (ULT) storage. The expansion will likely add specialized secondary packaging capabilities for ULT products, thereby improving its operational efficiencies.
The same month, Catalent signed a drug development agreement with Awakn Life Sciences Corp. to optimize the development, launch and supply of better patient treatments across multiple modalities.
Catalent, in August, announced that it will be acquiring Metrics Contract Services, a full-service specialty Contract Development and Manufacturing Organization from Mayne Pharma Group Limited. In July, Catalent entered into a manufacturing agreement with Xenetic Biosciences, Inc. which will include cGMP (current good manufacturing practices) manufacturing for the latter’s recombinant protein, Human DNase I. These developments raise our optimism about the stock.
Catalent is also likely to have benefited from the expansion of its primary packaging capabilities at its clinical supply facility in Shiga, Japan (June). The same month, Catalent had entered into a development agreement with MigVax to leverage its proprietary Zydis Bio orally disintegrating tablet technology for delivering the MigVax-101 vaccine.
In April, Catalent had announced its completion of a significant expansion of its nasal capabilities at its Morrisville, Research Triangle Park, NC, facility to provide improved services for developing and manufacturing unit and bi-dose nasal spray products. The same month, the company announced its completion of the installation and commissioning of four new high-throughput high-bay cGMP manufacturing suites at its facility in Kansas City, MO. These are likely to have contributed to the segment’s revenue in the to-be-reported quarter.
The Estimate Picture
For first-quarter fiscal 2023, the Zacks Consensus Estimate for total revenues of $1.06 billion implies an improvement of 3.9% from the prior-year quarter’s reported figure.
The consensus estimate for earnings is pegged at 55 cents per share, implying a decline of 22.5% from the prior-year quarter’s reported number.
What Our Model Suggests
Per our proven model, a stock with a Zacks Rank #1 (Strong Buy), #2 (Buy) or #3 (Hold), along with a positive Earnings ESP, has higher chances of beating estimates. This is not the case here, as you can see:
Earnings ESP: Catalent has an Earnings ESP of +3.74%. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Zacks Rank: The company currently carries a Zacks Rank #5 (Strong Sell).
Stocks Worth a Look
Here are a few medical stocks worth considering, as these have the right combination of elements to beat on earnings this reporting cycle.
McKesson Corporation (MCK - Free Report) has an Earnings ESP of +0.27% and a Zacks Rank of 2. MCK has an estimated long-term growth rate of 10.1%.
McKesson’s earnings surpassed estimates in three of the trailing four quarters and missed the same in one, with the average surprise being 13%. You can see the complete list of today’s Zacks #1 Rank stocks here.
Nevro Corp. (NVRO - Free Report) has an Earnings ESP of +10.91% and is a Zacks #2 Rank stock. NVRO has an estimated growth rate of 23.3% for 2022.
Nevro’s earnings surpassed estimates in two of the trailing four quarters, missed the same in one and matched in the other, with the average surprise being 5.7%.
GoodRx Holdings, Inc. (GDRX - Free Report) has an Earnings ESP of +21.62% and carries a Zacks Rank of 2 at present. GDRX has an estimated long-term growth rate of 16.4%.
GoodRx’s earnings surpassed estimates in three of the trailing four quarters and missed the same in one, with the average surprise being 19.4%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.