3Q18 EPS Beats on a Lower Tax Rate; Raising FY18 but Trimming FY19 Estimate
- 3Q18 (Feb) EPS of 32 cents (vs 20 cents last year) was 9 cents ahead of our estimate due entirely to a 4% tax rate for the quarter, as sales were slightly under our projection;
- Carrying through 3Q’s beat and incorporating a lower tax rate for 4Q, our FY18 EPS estimate is now $1.20 (from $1.09), on sales up 11% to $402 million, aided by new products and the growing genomics business;
- On a slight reduction in our sales growth expectations, our FY19 projection is now $1.29 (from $1.32), on sales up nearly 12% (from 13.5% previously) to $448 million.
Neogen develops, manufactures, and markets a line of products for food and animal safety. The company's segments are: Food Safety, which is engaged in the development, production and marketing of diagnostic test kits and related products used by food producers and processors to detect harmful natural toxins, foodborne bacteria, allergens and levels of general sanitation; and Animal Safety, which is engaged in the development, production and marketing of products dedicated to animal safety, including a range of consumable products marketed to veterinarians and animal health product distributors, and provides genomic identification and related interpretive bioinformatic services.
Great Lakes Review is located in Cleveland, Ohio, was founded in 1981 and became a division of Wellington Shields & Co. LLC in 2011. Great Lakes Review is a research boutique focused on the fundamentally-oriented investor seeking companies that dominate their respective specialty niche regardless of industry. The objective is to make money for the long-term by gradually accumulating a diversified portfolio from a universe of no more than 30 companies. Although short-term-oriented accounts will be alerted to trading opportunities, aggressive sell recommendations are triggered only by a deterioration in long-term fundamentals, not by short-term blips or investor fancy. Coverage of those names that lose their earnings momentum or earnings predictability may be dropped and replaced with more vital candidates.
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