Embecta stock slides on mixed Q4 results

Embecta shares dipped today on fourth-quarter results that came in mixed compared to the consensus forecast.

EEMBC shares fell more than 12% to $29.73 apiece in morning trading. MassDevice‘s MedTech 100 Index, which includes stocks of the world’s largest medical device companies, was up more than 4%.

The Parsippany, New Jersey-based company posted losses of $17.2 million. That amounts to 30¢ per share on sales of $274.6 million for the three months ended Sept. 30, 2022.

Embecta registered a significant bottom-line skid into the red on a sales decline of 8.7%. This time last year — as the diabetes arm of BD — Embecta posted profits of $97.1 million for the quarter. However, Embecta noted that last year’s numbers do not purport to reflect its performance if it were a standalone company.

The company also struggled to match Wall Street’s earnings projections, as analysts expected EPS of 66¢. It did, however, earn a beat on revenues as projections came in at $261 million.

In a news release, Embecta CEO Devdatt “Dev” Kurdikar attributed some struggles to the current macroeconomic environment. That includes incremental headwinds from foreign exchange and inflation. Still, he said the fourth-quarter performance “exceeded” the company’s guidance.

“2022 was a milestone year for Embecta, our first as a public company,” said Kurdikar. “Looking forward, fiscal year 2023 will be a critical year as we take steps to further strengthen our core business, make additional progress towards separating and standing up Embecta as an independent company, and invest in growth opportunities, including the further development of our type 2 closed-loop insulin delivery system.”

Last week, analysts maintained their neutral rating for Embecta ahead of this earnings report. They expect to reevaluate the company when it releases more details on its attempted entry into the insulin patch pump market. Currently, the closed-loop system Kurdikar mentioned utilizes the company’s proprietary patch pump. It carries FDA breakthrough device designation.

Embecta said it now expects to log adjusted EPS between $1.75 and $2 in 2023. The company projects sales between $1.05 billion and $1.073 billion. Drug Delivery Business