Shares of Catalent (NYSE: CTLT), a global provider of delivery technologies, development, drug manufacturing, and biologics cratered by more than 20% in morning trading on Monday after the company announced that it will delay the release of its fiscal Q3 results that were previously scheduled for Tuesday, May 9 to May 15, 2023.
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More disappointingly, Catalent projected a significant reduction in its FY23 net revenue and adjusted EBITDA guidance by more than $400 million each. In addition, the company also expects its income statement and balance sheet to reflect a goodwill impairment when it comes to its consumer health business of more than $200 million, primarily related to its acquisition of Bettera Wellness in October 2021.
There are two main reasons for Catalent’s disappointing forecast. One of them is “productivity issues and higher-than-expected costs experienced at three of its facilities, including two of its largest manufacturing facilities.” The other reason is that while finalizing its fiscal Q3 results, the company “identified certain potential non-cash adjustments related to its operations in Bloomington, Indiana,” and will require more time to review this matter.
Analysts are cautiously optimistic about CTLT stock with a Moderate Buy consensus rating based on six Buys and five Holds.
