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Neogen's Q2 Earnings: A Mixed Bag Amidst Market Challenges

Wesley ParkFriday, Jan 10, 2025 7:19 am ET
4min read


Neogen Corporation (NASDAQ: NEOG) recently reported its preliminary second-quarter 2025 results, offering a mixed bag of performance metrics amidst challenging market conditions. The company's revenue grew by 0.7% year-over-year to $231.3 million, while core revenue, excluding currency impacts and acquisitions, increased by 3.5%. However, the net loss for the quarter was $456.3 million, or $(2.10) per diluted share, primarily driven by a non-cash goodwill impairment charge related to the acquisition of the former 3M Food Safety Division.



Adjusted Net Income for the quarter was $24.4 million, or $0.11 per diluted share, a slight decline from the prior-year period. The Food Safety segment's revenue decreased by 0.1% to $164.2 million, while the Animal Safety segment's revenue increased by 2.8% to $67.0 million. The company's Adjusted EBITDA margin declined to 22.2% from 24.0% in the prior-year period, primarily due to the full cost to exit various transition service agreements and higher distribution costs.

NEOG EBITDA, Total Revenue
Name
Date
EBITDA
Total Revenue(USD)
NeogenNEOG
20250331
15.30M
216.96M


Neogen's President and Chief Executive Officer, John Adent, commented on the results, "The second quarter reflected steady progress, as we saw improvement across the business compared to the first quarter, with core revenue growth accelerating in both of our segments, sequential margin expansion and significantly better free cash flow." However, he also acknowledged the challenges faced by the company, stating that the integration of the former 3M Food Safety business has been slowed by end-market weakness and operational delays.

To address these challenges, Neogen has initiated restructuring actions focused on rightsizing its Genomics business and streamlining operations. The company has also entered the next phase of portfolio review, with specific projects actively underway to drive a higher level of focus in the business and improved profitability. Additionally, Neogen is updating its full-year guidance, now expecting revenue between $905-925 million and Adjusted EBITDA of $205-215 million, citing U.S. dollar strengthening and operational challenges.



In conclusion, Neogen's Q2 earnings snapshot reveals a mixed performance amidst challenging market conditions. While the company's core revenue growth and Adjusted Net Income were modestly positive, the net loss and Adjusted EBITDA margin decline highlight the ongoing challenges faced by the company. Neogen's strategic initiatives, such as restructuring and portfolio review, will be crucial in addressing these challenges and positioning the company for long-term growth. Investors should closely monitor Neogen's progress as it navigates the complex market landscape.
Comments

Post
Repa24
01/10
Holding $NEOG for animal safety growth. Diversifying my portfolio with biotech plays.
0
birdflustocks
01/10
Net loss hit hard, but core revenue's fighting. Keep an eye on those strategic moves. 🚀
0
Beetlejuice_hero
01/10
@birdflustocks What do you think about their restructuring plans?
0
uncensored_84
01/10
Free cash flow improvement is a win. Cash is king, right? 💸
0
James1997lol
01/10
3M acquisition woes continue. Operational delays are a real headwind. Frustrating but not surprising.
0
whiteiversonyeet
01/10
Mixed bag from Neogen. Core revenue up, but net loss hits hard. 🤔 Integration challenges need fixing for long-term growth.
0
Oleksandr_G
01/10
Portfolio review could shake things up. Maybe they'll find some hidden gems to focus on.
0
EightBitMemory
01/10
@Oleksandr_G What do you think they'll focus on?
0
thelastsubject123
01/10
Mixed bag, but core growth looks promising.
0
CaseEnvironmental824
01/10
Net loss hurts, but restructuring might help.
0
mmmoctopie
01/10
$TSLA and $AAPL got my cash, but $NEOG in my watchlist. Mixed signals in biotech.
0
EmergencyWitness7
01/10
Adjusted Net Income holding steady is a silver lining. Not great, but not terrible either.
0
Sorry-Palpitation-70
01/10
Holding NEOG long; believes in their strategy.
0
owter12
01/10
@Sorry-Palpitation-70 How long you been holding NEOG? You think they'll bounce back strong or still got a ways to go?
0
careyectr
01/10
Market challenges are real, but $NEOG has room to bounce back. 🤔
0
fluffnstuff1
01/10
Food Safety segment struggling. Maybe time to pivot or divest? Tough market out there.
0
itsCblast
01/10
@fluffnstuff1 Maybe divest, pivot soon? Markets tough.
0
Loud_Ad_6880
01/10
Holding NEOG for long haul. Believing in their strategy to streamline and focus. Risky, but potential for big upside if they succeed.
0
LonnieJaw748
01/10
$NEOG's EBITDA margin dip hurts, but restructuring might help. Long-term play?
0
Disclaimer: the above is a summary showing certain market information. AInvest is not responsible for any data errors, omissions or other information that may be displayed incorrectly as the data is derived from a third party source. Communications displaying market prices, data and other information available in this post are meant for informational purposes only and are not intended as an offer or solicitation for the purchase or sale of any security. Please do your own research when investing. All investments involve risk and the past performance of a security, or financial product does not guarantee future results or returns. Keep in mind that while diversification may help spread risk, it does not assure a profit, or protect against loss in a down market.
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