Catalent, Inc. CTLT reported first-quarter fiscal 2025 adjusted loss per share of 13 cents, flat year over year. The figure was wider than the Zacks Consensus Estimate of a loss of 11 cents per share.  

The company’s GAAP loss per share was 71 cents during the quarter, narrower than the year-ago period’s loss of $4.19 per share.

Catalent’s Revenues in Detail

Revenues grossed $1.02 billion in the reported quarter, up 4.2% year over year. However, the metric lagged the Zacks Consensus Estimate by 5.3%.

At constant exchange rate or CER, revenues were also up 4%, primarily driven by growth in the manufacture of prescription products, increased demand for orally disintegrating Zydis commercial products and gene therapy offerings. However, this was partially offset by a decline in demand for COVID-19-related programs.

After excluding COVID-related revenues in the first quarter of fiscal 2025, net revenues increased 13% year over year.

The top line was driven by strength in both the Biologics and Pharma and Consumer Health (PCH) segment.

Shares of this company were up nearly 2.6% in yesterday’s after-hours trading.

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CTLT’s Segments in Detail

Catalent reports via two segments — Biologics and PCH.

Revenues in the Biologics segment rose 2.9% year over year on a reported basis (up 3% at CER) to $461 million in the quarter under review.

Revenues in the PCH segment increased 5.4% from the year-ago period (up 5% at CER) to $563 million.

Catalent’s Geographic Performance

Geographically, CTLT operates via three regions — the United States, Europe and Other.

Revenues from the United States were $658 million (up 2% year over year), while revenues from Europe were $331 million (up 20.8% year over year).

Revenues from Other region declined 22.7% year over year to $68 million.

CTLT’s Operational Update

In the quarter under review, Catalent’s gross profit rose 7.1% to $181 million year over year. The gross margin expanded 48 basis points to 17.7%.

Selling, general and administrative expenses rose 22.9% to $252 million year over year.

Adjusted operating loss totaled $71 million compared with the prior-year quarter’s adjusted operating loss of $36 million.

Catalent’s Financial Update

Catalent exited first-quarter fiscal 2025 with cash and cash equivalents of $335 million compared with $289 million at the end of fiscal 2024. Total debt at the first quarter of fiscal 2025-end was $4.93 billion compared with $4.91 billion at the end of fiscal 2024.

Net cash provided by operating activities at the end of first-quarter fiscal 2025 was $61 million against net cash used in operating activities of $70 million a year ago.

CTLT’s Guidance

Catalent will not provide any outlook in light of the pending transaction with Novo Holdings.

Our Take

Catalent exited the first quarter of fiscal 2025 with solid year-over-year improvement in its overall top-line results. The revenue uptick in both segments and the majority of geographic regions were impressive as well. The continued strength in CTLT’s Zydis commercial products and gene therapy offerings buoys optimism. The gross margin expansion was an added plus.

However, Catalent’s lower-than-expected results and lower revenues from the Other region in the fiscal first quarter were disappointing. The company continued to face escalating operating costs during the quarter, which was discouraging.

Catalent’s Zacks Rank and Key Picks

CTLT currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader medical space that have announced quarterly results are Quest Diagnostics Incorporated DGX, ResMed Inc. RMD and Boston Scientific Corporation BSX.

Quest Diagnostics, carrying a Zacks Rank of 2 (Buy), reported third-quarter 2024 adjusted earnings per share (EPS) of $2.30, beating the Zacks Consensus Estimate by 1.8%. Revenues of $2.49 billion outpaced the consensus mark by 3.4%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Quest Diagnostics has a long-term estimated growth rate of 6.5%. DGX’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 3.4%.

ResMed reported first-quarter fiscal 2025 adjusted EPS of $2.20, beating the Zacks Consensus Estimate by 8.4%. Revenues of $1.22 billion surpassed the Zacks Consensus Estimate by 2.9%. It currently carries a Zacks Rank #2.

ResMed has a long-term estimated growth rate of 14.8%. RMD’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 6.4%.

Boston Scientific reported third-quarter 2024 adjusted EPS of 63 cents, beating the Zacks Consensus Estimate by 8.6%. Revenues of $4.21 billion surpassed the Zacks Consensus Estimate by 4.4%. It currently carries a Zacks Rank #2.

Boston Scientific has a long-term estimated growth rate of 13.8%. BSX’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 8.3%.

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