Neogen Corporation (NEOG) reported fiscal third‑quarter 2026 results that beat consensus expectations, with an adjusted earnings per share of $0.09 versus a consensus estimate of $0.06 (or $0.04 according to Zacks). Revenue reached $211.2 million, surpassing the $204.5 million estimate and marking a 0.1% increase on a core basis.
The quarter ended with a net loss of $17.0 million, compared with a $10.9 million loss in the same period a year earlier, and revenue fell 4.4% year‑over‑year from $221.0 million in Q3 2025. Core revenue, however, was essentially flat, up 0.1% on a core basis, reflecting a 4.0% core gain in the Food Safety segment offset by an 8.7% core decline in the Animal Safety segment driven by third‑party supplier issues.
Gross margin contracted from 49.9% to 46.9% year‑over‑year, largely due to duplicative costs associated with the Petrifilm manufacturing transition and tariff‑related inventory write‑offs. In contrast, adjusted EBITDA margin expanded to 22.8%, up 110 basis points sequentially, as cost controls and pricing power in the Food Safety business helped offset the headwinds in Animal Safety.
Management raised full‑year revenue guidance to $857 million–$860 million from $845 million–$855 million while maintaining adjusted EBITDA guidance at approximately $175 million, signaling confidence in revenue growth but also caution about potential margin pressure. The company also completed the divestiture of its Genomics business for $160 million, with net proceeds of about $140 million, to reduce debt and sharpen focus on core Food Safety operations.
"We continued to make significant progress on our strategic transformation in the third quarter as we look to stabilize and strengthen our core business. We are emboldened by the continued strength in core growth in our Food Safety segment," said CEO Mike Nassif. CFO Bryan Riggsbee added, "We delivered third quarter revenue of $211.2 million, representing a 0.1% increase on a core basis. As Mike noted, we saw continued strong core growth in our Food Safety segment, while supply chain disruptions within our Animal Safety segment had a significant impact on our results in the quarter."
The market reacted with a 6.29% decline in pre‑market trading, reflecting investor concern over the Animal Safety decline and the potential for margin pressure despite the earnings beat. The results underscore the company’s ongoing challenges in its legacy Animal Safety business while highlighting the resilience of its Food Safety segment and the strategic focus on core operations.
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