- Avantor Inc. (AVTR) shares dropped 19% to $12.41 after lowering its full-year organic revenue outlook to 1% growth to 1% decline, citing reduced demand in education and government markets due to new administration policies.
- First-quarter revenue fell 6% to $1.58 billion, missing analyst estimates of $1.61 billion, while adjusted earnings of 23 cents per share met expectations, amid leadership changes with CEO Michael Stubblefield’s planned exit.
Avantor Inc. (AVTR), a key player in the biopharma supply chain, is facing significant headwinds as its shares plummet 19% to $12.41 in midday trading on Friday, driven by a lowered full-year outlook and weaker-than-expected first-quarter performance. The Radnor, Pa.-based company now projects organic revenue to range between a 1% increase and a 1% decline, a downgrade from its prior forecast of 1% to 3% growth, citing reduced demand in its lab-solutions business, particularly from education and government end markets. This demand erosion is attributed to recent policy shifts under the new presidential administration, which have disrupted funding and spending patterns in these sectors.
Financially, Avantor reported a 6% revenue drop to $1.58 billion in the first quarter, falling short of analyst expectations of $1.61 billion. Despite the revenue shortfall, adjusted earnings of 23 cents per share aligned with consensus estimates, indicating that cost management efforts mitigated some of the impact. Outgoing Chief Executive Michael Stubblefield noted that while earnings and margins met internal targets, weakness in the lab-solutions segment – where sales declined 8% to $1.07 billion due to policy-driven demand reductions – heavily impacted overall performance. His impending departure, agreed upon with the board, further adds to the uncertainty, as Avantor actively searches for a new CEO to steer the company through these challenges.
The sharp 19% stock decline to $12.41 reflects investor concerns over Avantor’s exposure to volatile public-sector markets and its ability to adapt to shifting policy landscapes. As the biopharma supplier recalibrates its strategy, its 1% to -1% revenue outlook underscores the broader challenges facing the industry amidst economic and regulatory transitions.
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