Key Takeaways
Avantor ( AVTR ) shares sank 16% Friday after the maker of lab chemicals and other life sciences products announced its CEO was resigning, reported weaker-than-expected net sales as government spending fell, and slashed its guidance.
The company said the board and Michael Stubblefield agreed that this was the "right time to initiate a leadership transition." It added that Stubblefield will be stepping down as soon as his replacement is named, and that the board has already initiated the search and "plans to move through the process expeditiously." Stubblefield has led the firm since 2014.
Avantor Posts Weaker-Than-Expected Net Sales
Separately, Avantor reported first-quarter net sales slid 6% year-over-year to $1.58 billion, missing the Visible Alpha estimate of $1.61 billion. Adjusted earnings per share (EPS) of $0.23 was in line with forecasts.
Sales at its Laboratory Solutions division slumped 8% to $1.07 billion, which Stubblefield explained "was impacted by reduced demand—particularly in our Education and Government end market—following recent policy changes." Bioscience Production unit sales were down 1% to $516.4 million.
Stubblefield said the company was updating its full-year outlook "to reflect ongoing funding and policy-related headwinds." He added that Avantor was "implementing a comprehensive strategy to strengthen our Lab Solutions segment and are committed to moving with urgency to improve performance across the business." In addition, the company is expanding its cost-cutting plan, which is now expected to save $400 million by the end of 2027.
Avantor sees 2025 organic revenue growth in the range of minus 1% to plus 1%, compared to the previous prediction of plus 1% to plus 3%. It anticipates adjusted EBITDA margin of 17.5% to 18.5%, compared to the earlier 18.0% to 19.0%.
Shares of Avantor plunged to their lowest level in five years.
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