The food-safety company's shares fell 8% Tuesday before its results, then jumped about 12% after a revenue beat and higher guidance. Roughly three points of growth came from one-time factors.
Neogen’s share price reversed sharply after its earnings release. The company's shares fell 8.07% during Tuesday's regular session to $11.96, then rebounded sharply once its fiscal first-quarter results crossed shortly after the closing bell.
For the quarter ended , revenue rose 6.5% to $222.8 million, comfortably above the $208.2 million analysts expected. Core revenue grew 8.1%. Adjusted earnings were 8 cents a share, compared with expectations of 5 cents. On a GAAP basis, Neogen lost 5 cents a share, compared with a profit of 17 cents a year earlier that included a gain from a divestiture.
The company raised its full-year outlook modestly. It now expects fiscal 2027 revenue of $885 million to $890 million, up from $880 million to $885 million, and adjusted EBITDA of $181 million to $183 million, up from $180 million to $182 million.
Food Safety revenue rose 7.4% to $163.2 million and Animal Safety rose 4.2% to $59.6 million. Gross margin was 47.4%, or 49.8% on an adjusted basis. Adjusted EBITDA was $41.6 million, a margin of 18.7%. Free cash flow was $4.7 million.
The fine print on growth
Neogen said about three percentage points of its core growth came from prior-year distributor inventory adjustments and order timing. Strip that out and underlying growth is closer to 5%. That is still solid, but it is a less dramatic acceleration than the 8.1% headline suggests, and it matters because those benefits will not repeat.
Chief Executive Mike Nassif said the results "reflect encouraging progress as the changes underway across the organization continue to take hold."
Two operational milestones are ahead. The company plans to begin transitioning manufacturing for its Petrifilm product line in November, and expects to close the sale of its Genomics business to Zoetis by the end of December.
The shares traded at $13.39 in extended hours early Wednesday, up nearly 12% from Tuesday's close and above where they started Tuesday's session.
What to watch
The Petrifilm transition is the main execution risk. A smooth handover would support the higher guidance; disruption would weigh on Food Safety, Neogen's largest segment.