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Catalent (CTLT) to Report Q4 Earnings: What's in Store?

Catalent's (CTLT) Biologics segment is likely to have maintained its momentum, thereby aiding Q4 results.

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This story originally appeared on Zacks

Catalent, Inc. CTLT is scheduled to report fourth-quarter fiscal 2021 results on Aug 30, before market open.

- Zacks

In the last-reported quarter, the company’s earnings of 82 cents per share surpassed the Zacks Consensus Estimate by 7.9%. Over the trailing four quarters, its earnings outperformed the Zacks Consensus Estimate on all occasions, delivering an earnings surprise of 10.17%, on average.

Let’s see how things have shaped up prior to this announcement.

Factors to Note

Biologics Business

Per Catalent’s May 2021 update, the Biologics segment has been witnessing strength over the past few months on the back of robust demand for drug product, drug substance and viral vector offerings. As the volume of work related to COVID-19 vaccines and treatments remains high, the segment is expected to have maintained its strength in the fourth quarter of fiscal 2021 as well, thereby significantly driving up revenues.

Per the third-quarter fiscal 2021 earnings call in May, the company also confirmed that it is advancing its global Fill-Finish capacity, and has already completed the addition of two new suites at its biologics drug substance development and manufacturing facility in Madison, WI. The expansion is beginning to ramp up, and is expected to have boosted Catalent’s production capacities in the to-be-reported quarter.

This apart, during its last-reported quarter’s earnings call in May, Catalent confirmed its entry into the plasmid DNA technology and production space via the acquisition of Delphi Genetics and the launch of plasmid DNA development manufacturing services through an organic investment in its Rockville, MD facility. These two actions have enabled the company to establish plasmid DNA presence in both Europe and the United States. These are likely to have considerably driven segmental revenues in the fourth-quarter fiscal 2021.

Other notable buyouts which are expected to have driven Catalent’s top line in the to-be-reported quarter are those of the Anagni facility in Italy and MaSTherCell in Belgium.

Catalent, Inc. Price and EPS Surprise

Catalent, Inc. Price and EPS Surprise

Catalent, Inc. price-eps-surprise | Catalent, Inc. Quote

The Zacks Consensus Estimate for fourth-quarter Biologics revenues is pegged at $575 million, suggesting a surge of 60.6% from the year-ago quarter’s reported figure.

Other Factors

Catalent’s Clinical Supply Services arm is likely to have continued its strength in the to-be-reported quarter on the back of the company’s implementation of initiatives to rapidly expand its capacity to meet growing clinical supply needs. This is likely to have boosted the top line in the fiscal 2021 fourth quarter.

The Zacks Consensus Estimate for fiscal fourth-quarter Clinical Supply Services revenues stands at $100 million, indicating 19% growth from the year-ago quarter’s reported figure.

Catalent’s fiscal 2021 fourth-quarter top line is likely to have been hampered by lower revenues from its Softgel and Oral Technologies segment, which has been witnessing pandemic-related headwinds over the past few months. Although the impacts are gradually lessening, revenues are likely to be impacted to some extent due to the continued pandemic-led challenging business environment.

The Estimate Picture

For fourth-quarter fiscal 2021, the Zacks Consensus Estimate for total revenues of $1.13 billion implies an improvement of 18.9% from the prior-year quarter’s reported figure.

The consensus estimate for earnings per share is pegged at $1.04, implying an uptick of 15.6% from the prior-year period’s reported number.

What Our Model Suggests

Per our proven model, a stock with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) along with a positive Earnings ESP has higher chances of beating estimates. However, this is not the case here as you can see:

Earnings ESP: Catalent has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: The company currently carries a Zacks Rank #3.

Stocks Worth a Look

Here are a few medical stocks worth considering, as these have the right combination of elements to beat on earnings this reporting cycle:

DICK’S Sporting Goods, Inc. DKS has an Earnings ESP of +3.30% and a Zacks Rank of 1, at present. The company is slated to release second-quarter fiscal 2021 results on Aug 25. You can see the complete list of today’s Zacks #1 Rank stocks here.

Abercrombie & Fitch Company ANF has an Earnings ESP of +4.93% and a Zacks Rank of 1, at present. The company is slated to release second-quarter 2021 results on Aug 26.

Burlington Stores, Inc. BURL has an Earnings ESP of +12.69% and a Zacks Rank of 1, at present. The company is slated to release second-quarter 2021 results on Aug 26.



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