Why Embecta Shares Are Falling Today

Becton Dickinson and Co's BDX pure-play diabetes spin-off Embecta Corp EMBC has reported Q2 sales of $274.5 million, down 3.4% on a reported basis, down 1.3% on a constant currency basis.
Of the decrease, $6.0 million was attributable to unfavorable effects from foreign currency translation.
Volume unfavorably impacted revenues by approximately $3.7 million, primarily driven by customers in the U.S. and Europe.
Gross profit and margin were $191.2 million and 69.7%, compared to $196.3 million and 69.1% a year ago.
Net income was $79.6 million, compared to $107.9 million in Q1 FY21.
Adjusted EBITDA and margin were $116.8 million and 42.6%, compared to $141.6 million and 49.8% a year ago.
Guidance: Embecta expects 2H FY22 sales of approximately $555 million, down about 7% Y/Y.
Excluding foreign currency exchange rate fluctuations, revenue is expected to decrease by approximately 3.5%.
The company expects contract manufacturing revenue of approximately $15 million.
Adjusted gross margin is expected to be in the "low-60%s, with an adjusted EBITDA margin in the "low-30%s".
Price Action: EMBC shares are down 7.34% at $26.76 during the premarket session on the last check Friday.

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