NASDAQ$EMBC

Embecta Corp · Q3 2023 earnings

Q3 2023 earnings · · Investor relations

Briefing

Embecta reported financial results for the third quarter of fiscal year 2023.

Embecta's Q3 2023 revenues were $286.1 million, a decrease of 1.7% on a reported basis and 0.3% on a constant currency basis. The company reported a net income of $15.2 million, or $0.26 per diluted share, compared to $62.4 million, or $1.07 per diluted share, in the prior year period. Adjusted net income was $39.8 million, or $0.69 per diluted share. The company is tightening and raising its fiscal 2023 outlook for key financial metrics.

  • Revenues of $286.1 million, down 1.7% on a reported basis; down 0.3% on a constant currency basis.
  • U.S. revenues decreased 2.6% on both a reported and constant currency basis.
  • International revenues decreased 0.7% on a reported basis, and increased 2.4% on a constant currency basis.
  • Adjusted earnings per diluted share of $0.69.

Headline financials

Total Revenue

$286M

Previous: $291M-1.7%
EPS (adj)

$0.69

Previous: $1.07-35.5%
Adjusted Gross Profit Margin

66.3%

Previous: 69.8%-5.0%
Adjusted Operating Income Margin

27.9%

No prior period
Adjusted EBITDA Margin

32.2%

Previous: 40.5%-20.5%
Capital Expenditures

-$17.3M

Previous: -$15M-15.3%
Free Cash Flow

-$2.1M

Previous: $47.4M-104.4%
Net Income

$15.2M

Previous: $62.4M-75.6%
Operating Income

$51.3M

Previous: $97.1M-47.2%
Gross Profit

$190M

Previous: $203M-6.6%
Cash & Equivalents

$317M

Previous: $292M+8.6%
Total Assets

$1.25B

Previous: $1.05B+19.3%
Stock-Based Comp

$5.3M

Previous: $5.8M-8.6%

Revenue & EPS history

Embecta · Revenue · Quarterly

$286M

Q3 2023-1.7%vs Q3 2022
Beat estimate in 12 of 14 quarters(86%)
ActualEstimate

Forward guidance

For fiscal year 2023, the Company now expects revenues between $1,107 - $1,113 million, contract manufacturing ~$11 million, adjusted gross margin ~66.0%, adjusted operating margin ~29.5%, adjusted earnings per diluted share between $2.75 - $2.80, and adjusted EBITDA margin ~33.5%.

Tailwinds

  • Revenues: $1,107 - $1,113 million
  • Constant Currency: 0.5% - 1.0%
  • Adjusted Gross Margin: ~66.0%
  • Adjusted Operating Margin: ~29.5%
  • Adjusted Earnings per Diluted Share: $2.75 - $2.80

Headwinds

  • As Reported (%): (2.0%) - (1.5%)
  • F/X (%): (2.5)%
  • Contract Manufacturing: ~$11 million
  • We are unable to present a quantitative reconciliation of our expected adjusted gross margin, expected adjusted operating margin, expected adjusted earnings per diluted share, expected adjusted EBITDA and our expected adjusted EBITDA margin as we are unable to predict with reasonable certainty, and without unreasonable effort the impact and timing of any one-time items.
  • The financial impact of these one-time items is uncertain and is dependent on various factors, including timing, and could be material to our Condensed Consolidated Statements of Income.

Historical earnings impact

How earnings announcements have historically affected this stock's price.

Avg. return before/after earnings

Based on 19 quarterly earnings reports · overlaid with Q3 2023

Historical avgQ3 2023

+2.6%

Avg return

Earnings day

-0.9%

Avg return

5 days after

-8.3%

Avg return

30 days after

42%

8 / 19 earnings

Positive

+42.9%

Q4 2024

Best reaction

-15.7%

Q1 2024

Worst reaction

Earnings price reactions
QuarterReport dateReaction (Day 0)+5 days+30 days
Q2 2026+1.1%-60.6%-63.0%
Q1 2026-7.8%-9.3%-20.1%
Q4 2025-7.3%-12.9%-17.5%
Q2 2025-9.7%-12.9%-26.4%
Q1 2025-2.6%-3.8%-29.9%
Q4 2024+42.9%+44.6%+44.6%
Q3 2024+2.9%+2.9%+6.8%
Q2 2024+38.7%+42.2%+21.1%
Q1 2024-15.7%-18.1%-22.5%
Q4 2023+7.9%+7.1%+14.3%
Q3 2023-0.5%-3.6%-27.3%
Q2 2023-0.7%-3.4%-11.8%
Q1 2023+15.3%+12.0%+3.9%
Q4 2020-1.9%-4.3%-15.4%
Q4 2022-13.6%-15.3%-28.1%
Q3 2021+12.7%+16.6%+13.3%
Q3 2022+12.7%+16.6%+13.3%
Q2 2022-12.6%-7.7%-6.2%
Q2 2021-12.6%-7.7%-6.2%
Q4 2021
Q1 2022

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