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Catalent, Inc. (CTLT - Free Report) reported third-quarter fiscal 2023 adjusted loss per share of 9 cents against earnings per share (EPS) of $1.04 in the year-over-year period. The bottom line was narrower than the Zacks Consensus Estimate of a loss of 13 cents.
The adjustments include charges related to amortization, and acquisition, integration and other special items’ costs, among others.
The company’s GAAP loss per share was $1.26 during the quarter against the year-ago period’s EPS of 78 cents.
Revenues in Detail
Revenues grossed $1.04 billion in the reported quarter, down 18.5% year over year. However, the metric surpassed the Zacks Consensus Estimate by 11.5%.
At constant exchange rate or CER, revenues were down 17%.
The top line was hampered by soft performances by both its segment in the reported quarter.
Organic net revenues (excluding the impact of acquisitions, divestitures and currency translation) decreased 19% year over year.
Segments in Detail
Per Catalent’s new organizational structure, it reports via two segments — Biologics and Pharma and Consumer Health.
Revenues in the Biologics segment fell 32.1% year over year on a reported basis (down 32% at CER) to $475 million in the quarter under review.
This compares to our projection of fiscal third-quarter segmental revenues of $485.4 million.
Revenues in the Pharma and Consumer Health segment decreased 1.9% from the year-ago period (up 1% at CER) to $563 million.
This compares to our projection of fiscal third-quarter segmental revenues of $449.2 million.
In the quarter under review, Catalent’s gross profit fell 57.4% to $180 million. The gross margin contracted a huge 1587 basis points to 17.4%.
Selling, general and administrative expenses fell 8.2% to $190 million year over year.
Adjusted operating loss totaled $10 million against the prior-year quarter’s adjusted operating profit of $216 million.
Financial Update
Catalent exited the third quarter of fiscal 2023 with cash and cash equivalents of $252 million compared with $442 million at the end of the fiscal second quarter. Total debt at the end of third-quarter fiscal 2023 was $4.85 billion, flat compared with that at the end of the fiscal second quarter.
Cumulative net cash provided by operating activities at the end of third-quarter fiscal 2023 was $58 million compared with $370 million a year ago.
Guidance
Catalent has reduced its financial outlook for fiscal 2023 from the one it had provided during its presentation of its fiscal third-quarter business update in May.
The company projects revenues within $4,225 million-$4,325 million, down from the previous outlook of $4,250 million-$4,350 million for the full year. The Zacks Consensus Estimate for fiscal 2023 revenues is currently pegged at $4.28 billion.
Our Take
Catalent exited the third quarter of fiscal 2023 with dismal overall top-line and bottom-line performances. The decline in both segments’ reported revenues during the period was disappointing as well. Rising operating costs leading to the contraction of gross margin in the quarter do not bode well. Catalent incurring adjusted operating loss also raises apprehension.
On a positive note, Catalent’s better-than-expected results in the reported quarter and the year-over-year improvement in the Pharma and Consumer Health segment at CER were impressive. Catalent had undertaken some facility expansion activities during the reported quarter, besides launching some notable products over the past few months. These developments raise our optimism about the stock.
Zacks Rank and Stocks to Consider
Catalent currently carries a Zacks Rank #5 (Strong Sell).
Some better-ranked stocks in the broader medical space that have announced quarterly results are Hologic, Inc. (HOLX - Free Report) , Merit Medical Systems, Inc. (MMSI - Free Report) and Boston Scientific Corporation (BSX - Free Report) .
Hologic, carrying a Zacks Rank of 2 (Buy), reported second-quarter fiscal 2023 adjusted EPS of $1.06, beating the Zacks Consensus Estimate by 20.5%. Revenues of $ $1.03 billion outpaced the consensus mark by 6.2%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Hologic has an estimated growth rate of 5.1% for fiscal 2024. HOLX’s earnings surpassed estimates in all the trailing four quarters, the average being 27.3%.
Merit Medical reported first-quarter 2023 adjusted EPS of 64 cents, beating the Zacks Consensus Estimate by 16.4%. Revenues of $297.6 million surpassed the Zacks Consensus Estimate by 5.9%. It currently carries a Zacks Rank #2.
Merit Medical has a long-term estimated growth rate of 11%. MMSI’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 20.2%.
Boston Scientific reported first-quarter 2023 adjusted EPS of 47 cents, beating the Zacks Consensus Estimate by 9.3%. Revenues of $3.39 billion surpassed the Zacks Consensus Estimate by 7.6%. It currently carries a Zacks Rank #2.
Boston Scientific has a long-term estimated growth rate of 11.5%. BSX’s earnings surpassed estimates in two of the trailing four quarters and missed in the other two, the average surprise being 1.9%.
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Catalent (CTLT) Tops Q3 Earnings Estimates, Cuts FY23 View
Catalent, Inc. (CTLT - Free Report) reported third-quarter fiscal 2023 adjusted loss per share of 9 cents against earnings per share (EPS) of $1.04 in the year-over-year period. The bottom line was narrower than the Zacks Consensus Estimate of a loss of 13 cents.
The adjustments include charges related to amortization, and acquisition, integration and other special items’ costs, among others.
The company’s GAAP loss per share was $1.26 during the quarter against the year-ago period’s EPS of 78 cents.
Revenues in Detail
Revenues grossed $1.04 billion in the reported quarter, down 18.5% year over year. However, the metric surpassed the Zacks Consensus Estimate by 11.5%.
At constant exchange rate or CER, revenues were down 17%.
The top line was hampered by soft performances by both its segment in the reported quarter.
Organic net revenues (excluding the impact of acquisitions, divestitures and currency translation) decreased 19% year over year.
Segments in Detail
Per Catalent’s new organizational structure, it reports via two segments — Biologics and Pharma and Consumer Health.
Revenues in the Biologics segment fell 32.1% year over year on a reported basis (down 32% at CER) to $475 million in the quarter under review.
This compares to our projection of fiscal third-quarter segmental revenues of $485.4 million.
Revenues in the Pharma and Consumer Health segment decreased 1.9% from the year-ago period (up 1% at CER) to $563 million.
This compares to our projection of fiscal third-quarter segmental revenues of $449.2 million.
Catalent, Inc. Price, Consensus and EPS Surprise
Catalent, Inc. price-consensus-eps-surprise-chart | Catalent, Inc. Quote
Operational Update
In the quarter under review, Catalent’s gross profit fell 57.4% to $180 million. The gross margin contracted a huge 1587 basis points to 17.4%.
Selling, general and administrative expenses fell 8.2% to $190 million year over year.
Adjusted operating loss totaled $10 million against the prior-year quarter’s adjusted operating profit of $216 million.
Financial Update
Catalent exited the third quarter of fiscal 2023 with cash and cash equivalents of $252 million compared with $442 million at the end of the fiscal second quarter. Total debt at the end of third-quarter fiscal 2023 was $4.85 billion, flat compared with that at the end of the fiscal second quarter.
Cumulative net cash provided by operating activities at the end of third-quarter fiscal 2023 was $58 million compared with $370 million a year ago.
Guidance
Catalent has reduced its financial outlook for fiscal 2023 from the one it had provided during its presentation of its fiscal third-quarter business update in May.
The company projects revenues within $4,225 million-$4,325 million, down from the previous outlook of $4,250 million-$4,350 million for the full year. The Zacks Consensus Estimate for fiscal 2023 revenues is currently pegged at $4.28 billion.
Our Take
Catalent exited the third quarter of fiscal 2023 with dismal overall top-line and bottom-line performances. The decline in both segments’ reported revenues during the period was disappointing as well. Rising operating costs leading to the contraction of gross margin in the quarter do not bode well. Catalent incurring adjusted operating loss also raises apprehension.
On a positive note, Catalent’s better-than-expected results in the reported quarter and the year-over-year improvement in the Pharma and Consumer Health segment at CER were impressive. Catalent had undertaken some facility expansion activities during the reported quarter, besides launching some notable products over the past few months. These developments raise our optimism about the stock.
Zacks Rank and Stocks to Consider
Catalent currently carries a Zacks Rank #5 (Strong Sell).
Some better-ranked stocks in the broader medical space that have announced quarterly results are Hologic, Inc. (HOLX - Free Report) , Merit Medical Systems, Inc. (MMSI - Free Report) and Boston Scientific Corporation (BSX - Free Report) .
Hologic, carrying a Zacks Rank of 2 (Buy), reported second-quarter fiscal 2023 adjusted EPS of $1.06, beating the Zacks Consensus Estimate by 20.5%. Revenues of $ $1.03 billion outpaced the consensus mark by 6.2%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Hologic has an estimated growth rate of 5.1% for fiscal 2024. HOLX’s earnings surpassed estimates in all the trailing four quarters, the average being 27.3%.
Merit Medical reported first-quarter 2023 adjusted EPS of 64 cents, beating the Zacks Consensus Estimate by 16.4%. Revenues of $297.6 million surpassed the Zacks Consensus Estimate by 5.9%. It currently carries a Zacks Rank #2.
Merit Medical has a long-term estimated growth rate of 11%. MMSI’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 20.2%.
Boston Scientific reported first-quarter 2023 adjusted EPS of 47 cents, beating the Zacks Consensus Estimate by 9.3%. Revenues of $3.39 billion surpassed the Zacks Consensus Estimate by 7.6%. It currently carries a Zacks Rank #2.
Boston Scientific has a long-term estimated growth rate of 11.5%. BSX’s earnings surpassed estimates in two of the trailing four quarters and missed in the other two, the average surprise being 1.9%.