|Neogen CEO James Herbert|
As Neogen ($NEOG) offers its animal and food safety products to a growing international customer base, the company continues to struggle with currency fluctuations. Before the stock market opened on Monday, the Michigan-based company reported that its revenues during its first fiscal quarter grew 11% year-over-year to $74.9 million. But the results didn't quite live up to the expectations of analysts, who expected the fast-growing company to report $76 million in sales during the period, according to Zacks Investment Research.
The company's net income rose 5% to $9.3 million, or $0.25 per share, just missing analysts' average estimate of $0.26. In its earnings release, Neogen reported that it nearly reached its goal of hitting operating income that was 20% of sales, but currency woes were a drag on the top and bottom lines, shaving $0.02 per share off earnings.
Neogen has been working to expand its animal safety and genomics business, a cornerstone of which is GeneSeek, a lab that can screen cattle DNA for 150,000 genetic variations. Revenues from GeneSeek rose 12% during the quarter, the company reported.
Neogen reported a 10% sales increase in its animal safety segment, which was boosted by its June 1 acquisition of Sterling Test House of India. The addition allowed Neogen to establish a home base in India for its animal safety services. During the quarter, the company also acquired U.K.-based Lab M Holdings, a maker of culture media and diagnostic systems.
In July, Neogen's shares shot up 20% to more than $58 after the company announced record fourth-quarter earnings. The stock has since settled back to $54.19.
Despite the ongoing currency challenges, James Herbert, Neogen's CEO, said in the earnings release that he was pleased with the company's strong start to its fiscal year. "We were able to complete two strategic acquisitions in the quarter, while building our core business through broad-based increases in sales across many of our diverse product lines and market segments," he said.
- here's the earnings release