Neogen Corp (NASDAQ:NEOG) stock rose 3.41% (As on October 11, 11:18:41 AM UTC-4, Source: Google Finance) after the company posted higher than expected results for the first quarter of FY 25. Core revenue, which excludes the impacts of foreign currency translation, as well as acquisitions completed and product lines discontinued in the last 12 months, declined by 1.4%. Acquisitions and discontinued product lines did not impact core growth this quarter, while foreign currency had a negative impact of 3.9%. Adjusted Net Income was $14.4 million compared to $23.7 million, in the prior-year period. Gross margin was 48.4% in the first quarter of fiscal 2025. This compares to a gross margin of 51.0% in the same quarter a year ago, with the decrease primarily due to lower volume and continued higher distribution costs. First-quarter Adjusted EBITDA was $43.7 million, representing an Adjusted EBITDA Margin of 20.1%, compared to $52.4 million and a margin of 22.9% in the prior-year period. As of August 31, 2024, the Company had total cash of $120.5 million and total outstanding non-current debt of $900.0 million, as well as committed borrowing headroom of $150.0 million.

Moreover, revenues for the Food Safety segment were $159.3 million in the first quarter, a decrease of 4.2% compared to $166.3 million in the prior year, consisting of 1.1% core growth, a 0.1% contribution from acquisitions and discontinued product lines and a negative foreign currency impact of 5.4%. Revenues for the Animal Safety segment were $57.6 million in the first quarter, a decrease of 8.1% compared to $62.7 million in the prior year, consisting of a 7.8% core revenue decline and 0.3% headwind from discontinued product lines. The decline was driven primarily by lower sales in our animal care & other and biosecurity product categories.

NEOG in the first quarter of FY 25 has reported the adjusted earnings per share of 7 cents, beating the analysts’ estimates for the adjusted earnings per share of -4 cents. The company had reported the adjusted revenue decline of 5.3 percent to $217 million in the first quarter of FY 25, beating the analysts’ estimates for revenue of $216.1 million.

Neogen sees FY 2025 revenue to be in the range of $925.00M-$955.00M versus the analyst consensus of $935.00M. The Company continues to expect capital expenditures to be approximately $85 million, including approximately $55 million related specifically to the integration of the former 3M Food Safety Division.