What happened
Shares of Fortrea Holdings (FTRE 0.36%) were sinking 10.9% lower at 11:10 a.m. ET on Monday. The decline came after the global contract research organization (CRO) announced its second-quarter results.
Fortrea reported Q2 revenue of $793 million. This result was flat year over year (YOY). The company also posted earnings of $28.3 million, or $0.32 per share. In the prior-year period, Fortrea generated earnings of $66.4 million, or $0.75 per share.
So what
Investors were watching Fortrea's Q2 results especially closely for one key reason: It was the company's first quarter as a stand-alone entity. Labcorp completed the spin-off of Fortrea on June 30, 2023.
While the life sciences stock tumbled as a result of Fortrea's deteriorating bottom line, it's best not to make too much of a single quarter. What matters most is how the company's business performs over the long run.
Fortrea CEO Tom Pike expressed optimism about the company's future. He said that the CRO is "positioned to make rapid progress against our goals and strategies, leveraging our customer relationships to drive revenue growth and margin expansion in an attractive clinical services market."
Now what
It remains to be seen how long it will take Fortrea to achieve the rosy vision cast by Pike. The high end of the company's full-year 2023 revenue guidance of $3.034 billion to $3.096 billion is flat YOY. The lower end of the range represents a 2% decline from 2022. Fortrea also expects its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) to decline between 29.6% and 37% in full-year 2023.
