Embecta (EMBC 8.72%) stock crashed Tuesday following the company's latest quarterly report. The medical-device specialist's share price ended the daily session down 57.8%.
Before the market opened this morning, Embecta published results for the second quarter of its 2026 fiscal year -- which ended March 31. The company's sales and earnings for the period came in significantly weaker than expected, and investors aren't feeling optimistic about the near-term future.
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Embecta posted big misses in fiscal Q2
With its fiscal Q2 report, Embecta announced non-GAAP (adjusted) earnings per share of $0.27 on sales of $221.8 million. Meanwhile, the average analyst estimate had called for the business to record an adjusted profit of $0.42 per share on sales of roughly $235.7 million. Embecat's sales unexpectedly declined 14.4% year over year in fiscal Q2, and margins were significantly softer tahn anticipated. The company recorded an adjsuted earnings before interest, taxes, depreciation, and amortization (EBITDA) margin of 29.1% in the quarter -- down from a margin of 37.5% in last year's quarter.
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What's on deck for Embecta?
With its fiscal Q2 report, Embecta lowered its full-year sales guidance to between $1.015 billion and $1.035 -- down from previous guidance for sales between $1.071 billion and $1.093 billion. The downward sales revision doesn't look massive, but it does raise questions about the company's near-term growth outlook. Meanwhile, the company's adjusted operating margin is now expected to be between 22.25% and 23.25% -- representing a substantial reduction from the previous guidance for a margin between 29% and 30% in the period.
The company expects to close its acquisition of Owen Mumford and for the purchase to have a dilutive impact on earnings of roughly $0.15 per share. While acquisition-related expenses will present an earnings headwind, the company's move to lower guidance on adjusted earnings per share from between $2.80 and $3 to between $1.55 per share and $1.75 per share raises some big questions for investors.
