Embecta Corp. (EMBC) shares tumbled 7.79% in pre-market trading on Tuesday after the diabetes care company reported fourth-quarter results that fell short of analyst expectations and provided a cautious outlook for fiscal 2026.
For the fourth quarter, Embecta posted revenue of $264 million, down 7.7% year-over-year and below the consensus estimate of $265.7 million. Adjusted earnings per share came in at $0.50, missing the expected $0.54. The company attributed the revenue decline to several factors, including the impact of advanced distributor ordering in previous quarters and ongoing business challenges in China.
Looking ahead, Embecta provided initial guidance for fiscal 2026, projecting revenue between $1.071 billion and $1.093 billion, and adjusted earnings per share in the range of $2.80 to $3.00. While the revenue forecast aligns with analyst expectations, the earnings outlook suggests potential headwinds. The company also anticipates an adjusted operating margin of 29% to 30% for the year.
Despite the disappointing results, Embecta highlighted its progress in debt reduction and operational efficiency. The company reduced its debt by approximately $184.5 million in fiscal 2025, exceeding its original target. However, investors appear to be focusing on the near-term challenges and uncertain growth prospects, leading to the significant pre-market sell-off.
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