Blowing out the June 2017 high, shares of Catalent (CTLT 40.70, +5.34 +15.1%) are advancing in reaction to the company’s Q4 earnings and revenue beat and with a forecast for improving revenues in the coming fiscal year, the company impressed the street.
By all accounts, CTLT turned in an impressive Q4 with earnings of $0.65 per share on revenues which rose 15.9% compared to last year to about $616.9 million.
Breaking the top line down a bit further, revenue from the Softgel Technologies segment – which is engaged in soft capsule and softgel development for prescriptions -- was $257.1 million for Q4, an increase of 14% as reported, or 16% in constant currency, compared to Q4 a year ago. The constant-currency growth was attributable to higher end-market demand for prescription products in Europe. Increased demand for prescription and consumer health products in North America also contributed to the growth, but was partially offset by lower end-market demand for consumer health products in Asia Pacific. The acquisition of Accucaps contributed 14 percentage points of the segment's constant-currency revenue growth during the quarter.
In the company’s Drug Delivery Solutions segment, revenues were $270.2 million in Q4, an increase of 13% as reported, or 16% in constant currency, over last year’s Q4. The growth was primarily driven by favorable end-customer demand for certain higher margin offerings within the company’s oral delivery solutions platform and increased volume related to CTLT’s biologics offerings. The acquisition of Pharmatek contributed 3 percentage points of the segment's constant-currency revenue growth during the quarter.
Lastly, revenues from the Clinical Supply Services segment were $99.3 million for Q4, an increase of 22% as reported, or an increase of 28% in constant currency over last year. This growth was due to higher volume related to core storage, distribution, manufacturing, and packaging services; as well as due to increased lower-margin comparator sourcing activities.
Even more, CTLT also guided the coming year better than market expectations on the top line. For FY18, the company sees revenues between $2.16-2.24 billion. For FY18, the company sees adjusted net income of $192-212 million with adjusted EBITDA in the range of $477-497 million. These guidance ranges continue to be consistent with the organic, constant-currency long-term CAGR growth expectations of 4-6% for revenue and 6-8% for Adjusted EBITDA.
The Q4 performance and robust FY18 revenue outlook have the stock on a proper run today, not that it was needed as the stock was up about 50% YTD ahead of the print.