Neogen Profit Rises As Revenue Climbs 15% - Update

(RTTNews) - Neogen Corp (NEOG), a maker of products for food and animal safety, Monday reported a 13 percent increase in first-quarter profit, helped by a double-digit revenue growth, partly offset by some weak margins. However, revenue for the quarter fell short of Wall Street estimates.

Neogen, based in Lansing, Michigan, posted quarterly net earnings of $8.9 million or $0.24 per share, compared with $7.8 million or $0.21 per share last year.

Results for the quarter included a $241,000 gain in other income related to an earn-out provision in the SyrVet acquisition, while the prior year had charges of $636,000 due to currency translations.

On average, seven analysts polled by Thomson Reuters expected earnings of $0.23 per share for the quarter. Analysts' estimates typically exclude special items.

Revenue for the first quarter climbed 15 percent to $67.6 million from $58.6 million a year ago.

The company said revenue at its animal safety segment jumped 28 percent. Revenue was boosted by acquisitions of veterinary instruments businesses, SyrVet and Prima Tech, and agricultural insecticides business, Chem-Tech.

Revenue at its food safety segment climbed 3 percent as more sales of multiple product lines into several market segments more than offset lower sales of mycotoxin and meat speciation test kits.

Revenues from Neogen's agrigenomic business increased 16 percent.

Gross margin for the quarter slid to 50.4 percent from 51.9 percent last year, and operating margin to 19.9 percent from 21.2 percent.

Neogen recently entered into a strategic deal with Merck Animal Health for the distribution of Neogen's Igenity Dairy Heifer Program. The program consists of genomic tests that offer commercial dairy producers essential information on the genetic potential of replacement dairy heifers.

Neogen stock is trading at $40.31, down $0.53 or 1.29%, on the Nasdaq.