BioTechne Corporation (TECH) saw its stock fall during the third quarter of 2024, driven by a revenue shortfall and weakening gross margins. The decline followed a disappointing earnings report that underscored challenges in its core life sciences reagents segment.
- BioTechne reported Q3 2024 revenue of $287.3 million, missing consensus by $6.8 million.
- Gross margin declined to 60.2%, down from 62.8% in Q3 2023.
- Operating income dropped 17% year-over-year to $48.6 million.
- Life sciences reagents segment revenue declined 4.7% year-over-year.
- Stock lost approximately 12% of its value during Q3 2024.
- Investor concerns centered on supply chain costs and demand softness in academic research.
BioTechne (TECH) experienced a notable downturn in its share price during Q3 2024, with the stock closing the quarter approximately 12% lower than its starting level. The decline followed the company’s release of third-quarter financial results, which revealed revenue of $287.3 million—below the consensus estimate of $294.1 million. This represented a 2.4% year-over-year decrease, marking the first quarterly revenue decline in over two years. The company’s gross margin contracted to 60.2% in Q3, down from 62.8% in the same period last year, primarily due to higher raw material costs and increased logistics expenses tied to supply chain disruptions. Operating income fell to $48.6 million, a 17% drop from the prior-year quarter, reflecting rising R&D and selling, general, and administrative (SG&A) expenses. Despite a modest 3.1% increase in net income to $55.8 million, investors reacted negatively, citing concerns over the sustainability of growth in the life sciences reagents market. The segment, which accounts for roughly 68% of total revenue, saw a 4.7% year-over-year decline in demand, particularly in academic research and government-funded laboratories. Market analysts noted that the underperformance has prompted reassessments of biotech equities with similar exposure to lab supply chains. Shares in peer companies such as Thermo Fisher Scientific (TMO) and Danaher (DHR) also saw moderate weakness, though to a lesser extent. The broader healthcare sector’s sentiment remains cautious, with investors prioritizing companies demonstrating pricing power and resilient demand.