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In the last reported quarter, the company’s loss of 9 cents per share was narrower than the Zacks Consensus Estimate of a loss of 13 cents per share. Over the trailing four quarters, its earnings outperformed the Zacks Consensus Estimate on two occasions and missed the same in the other two, delivering a negative earnings surprise of 2.7%, on average.
Let’s see how things have shaped up prior to this announcement.
Factors to Note
Biologics Business
In June, Catalent expanded its integrated development, manufacturing and supply solution, OneBio Suite, across a range of biologic modalities, including antibody and recombinant proteins, cell and gene therapies and mRNA. In the same press release, Catalent confirmed recent advancements across the Biologics segment, including high-speed syringe filling line investments at its sites in Anagni, Italy, and Bloomington, IN. The company may provide an update on the launch progress for OneBio Suite on its fourth-quarter earnings call.
Per Catalent’s fiscal third-quarter 2023 earnings update in June, it has been recording a significant decline in its COVID revenues but continued strength in non-COVID revenues in the segment. We expect this trend to have continued in the fiscal fourth quarter, thereby driving up Catalent’s non-COVID business.
We are also optimistic about Catalent’s extended and expanded manufacturing partnership with Moderna and its expanded partnership with Sarepta Therapeutics, Inc. (in January).
However, Catalent confirmed witnessing some margin issues in the Biologics segment in the second half of fiscal 2023, particularly with respect to its significant investments in new modalities, including cell therapies and plasmids. Although management confirmed taking actions in these areas, it observed that the service offerings are currently having very low levels of absorption and utilization and were running below breakeven levels. This raises our apprehension about the segment in the to-be-reported quarter.
We estimate the fiscal fourth-quarter Biologics revenues to be $518.2 million, suggesting a decline of 22.8% from the year-ago quarter’s reported figure.
In June, the company shared that Catalent Biologics’ European drug product network also recently saw the completion of upgrades to its site in Limoges, France. This makes it the company’s European center of excellence for early-phase clinical and small-scale commercial biologics formulation development and drug product fill/finish.
In the last reported quarter, the segment's revenue growth benefited from Catalent’s acquired Metrics business. The company is likely to have benefited from the acquired business in the fiscal fourth quarter, thereby pushing up the segmental revenues.
Catalent is also likely to have benefited from its expansion to its clinical supply facility in Singapore (February) and the Waigaoqiao Free Trade Zone in Shanghai, China. Another likely contributor to Catalent’s fiscal fourth-quarter revenues is its ProteoSuite Oral suite (launched in March).
Notable agreements with Harm Reduction Therapeutics and Bhami Research Laboratory (both in March) also look promising.
However, the unexpected supply chain issues related to a top product faced by Catalent in the fiscal third quarter are likely to have persisted in the fiscal fourth quarter despite the company’s attempts to resolve the same. This raises our apprehension about the segment’s performance in the to-be-reported quarter.
We estimate the fiscal fourth-quarter Pharma and Consumer Health revenues to be $526.2 million, suggesting a decline of 18% from the year-ago quarter’s reported figure.
The Estimate Picture
For fourth-quarter fiscal 2023, the Zacks Consensus Estimate for total revenues of $1.05 billion implies a decline of 20% from the prior-year quarter’s reported figure.
The consensus estimate for earnings per share is pegged at 11 cents, implying a decline of 90.8% 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 below.
Earnings ESP: Catalent has an Earnings ESP of 0.00%. 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 other stocks worth considering, as these have the right combination of elements to beat on earnings this reporting cycle.
Patterson Companies’ earnings surpassed estimates in three of the trailing four quarters and missed once, with the average surprise being 4.5%.
American Eagle Outfitters, Inc. (AEO - Free Report) has an Earnings ESP of +8.52% and a Zacks Rank of 2. AEO has an estimated long-term growth rate of 9.6%.
American Eagle’s earnings surpassed estimates in two of the trailing four quarters, missed once and broke even in the other, with the average surprise being 9.2%.
American Woodmark Corporation (AMWD - Free Report) has an Earnings ESP of +8.43% and carries a Zacks Rank of 2 at present. AMWD has an estimated long-term growth rate of 13%.
American Woodmark’s earnings surpassed estimates in three of the trailing four quarters and missed once, with the average surprise being 26.8%.
Image: Bigstock
Catalent (CTLT) to Report Q4 Earnings: What's in the Cards?
Catalent, Inc. (CTLT - Free Report) is scheduled to report fourth-quarter fiscal 2023 results on Aug 29, before market open.
In the last reported quarter, the company’s loss of 9 cents per share was narrower than the Zacks Consensus Estimate of a loss of 13 cents per share. Over the trailing four quarters, its earnings outperformed the Zacks Consensus Estimate on two occasions and missed the same in the other two, delivering a negative earnings surprise of 2.7%, on average.
Let’s see how things have shaped up prior to this announcement.
Factors to Note
Biologics Business
In June, Catalent expanded its integrated development, manufacturing and supply solution, OneBio Suite, across a range of biologic modalities, including antibody and recombinant proteins, cell and gene therapies and mRNA. In the same press release, Catalent confirmed recent advancements across the Biologics segment, including high-speed syringe filling line investments at its sites in Anagni, Italy, and Bloomington, IN. The company may provide an update on the launch progress for OneBio Suite on its fourth-quarter earnings call.
Per Catalent’s fiscal third-quarter 2023 earnings update in June, it has been recording a significant decline in its COVID revenues but continued strength in non-COVID revenues in the segment. We expect this trend to have continued in the fiscal fourth quarter, thereby driving up Catalent’s non-COVID business.
We are also optimistic about Catalent’s extended and expanded manufacturing partnership with Moderna and its expanded partnership with Sarepta Therapeutics, Inc. (in January).
However, Catalent confirmed witnessing some margin issues in the Biologics segment in the second half of fiscal 2023, particularly with respect to its significant investments in new modalities, including cell therapies and plasmids. Although management confirmed taking actions in these areas, it observed that the service offerings are currently having very low levels of absorption and utilization and were running below breakeven levels. This raises our apprehension about the segment in the to-be-reported quarter.
We estimate the fiscal fourth-quarter Biologics revenues to be $518.2 million, suggesting a decline of 22.8% from the year-ago quarter’s reported figure.
Catalent, Inc. Price and EPS Surprise
Catalent, Inc. price-eps-surprise | Catalent, Inc. Quote
Pharma and Consumer Health
In June, the company shared that Catalent Biologics’ European drug product network also recently saw the completion of upgrades to its site in Limoges, France. This makes it the company’s European center of excellence for early-phase clinical and small-scale commercial biologics formulation development and drug product fill/finish.
In the last reported quarter, the segment's revenue growth benefited from Catalent’s acquired Metrics business. The company is likely to have benefited from the acquired business in the fiscal fourth quarter, thereby pushing up the segmental revenues.
Catalent is also likely to have benefited from its expansion to its clinical supply facility in Singapore (February) and the Waigaoqiao Free Trade Zone in Shanghai, China. Another likely contributor to Catalent’s fiscal fourth-quarter revenues is its ProteoSuite Oral suite (launched in March).
Notable agreements with Harm Reduction Therapeutics and Bhami Research Laboratory (both in March) also look promising.
However, the unexpected supply chain issues related to a top product faced by Catalent in the fiscal third quarter are likely to have persisted in the fiscal fourth quarter despite the company’s attempts to resolve the same. This raises our apprehension about the segment’s performance in the to-be-reported quarter.
We estimate the fiscal fourth-quarter Pharma and Consumer Health revenues to be $526.2 million, suggesting a decline of 18% from the year-ago quarter’s reported figure.
The Estimate Picture
For fourth-quarter fiscal 2023, the Zacks Consensus Estimate for total revenues of $1.05 billion implies a decline of 20% from the prior-year quarter’s reported figure.
The consensus estimate for earnings per share is pegged at 11 cents, implying a decline of 90.8% 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 below.
Earnings ESP: Catalent has an Earnings ESP of 0.00%. 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 other stocks worth considering, as these have the right combination of elements to beat on earnings this reporting cycle.
Patterson Companies, Inc. (PDCO - Free Report) has an Earnings ESP of +5.66% and a Zacks Rank of 2. PDCO has an estimated long-term growth rate of 9.2%. You can see the complete list of today’s Zacks #1 Rank stocks here.
Patterson Companies’ earnings surpassed estimates in three of the trailing four quarters and missed once, with the average surprise being 4.5%.
American Eagle Outfitters, Inc. (AEO - Free Report) has an Earnings ESP of +8.52% and a Zacks Rank of 2. AEO has an estimated long-term growth rate of 9.6%.
American Eagle’s earnings surpassed estimates in two of the trailing four quarters, missed once and broke even in the other, with the average surprise being 9.2%.
American Woodmark Corporation (AMWD - Free Report) has an Earnings ESP of +8.43% and carries a Zacks Rank of 2 at present. AMWD has an estimated long-term growth rate of 13%.
American Woodmark’s earnings surpassed estimates in three of the trailing four quarters and missed once, with the average surprise being 26.8%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.