By Bhanvi Satija
(Reuters) - Catalent (NYSE:CTLT)'s shares shot up 12% on Monday as the contract drug manufacturer posted third-quarter revenue ahead of estimates after a long delay caused by persistent production issues at its major facilities.
The company reported a larger-than-expected quarterly loss and cut its annual revenue forecast for the second time, but strength in its biologics unit drove quarterly sales past tempered Wall Street estimates.
Catalent's "results cleared an admittedly low bar", Stephens analyst Jacob Johnson said.
"After a number of shoes dropping and a lot of noise recently, today was a good first or second step."
The company had delayed its quarterly results report thrice in less than a month, hit by production snags at three of its key facilities, including in Brussels, where it does filling work for Novo Nordisk (NYSE:NVO)'s obesity drug Wegovy.
The issues drove up expenses and further hampered the company's cost-cutting efforts that were already under pressure from regulatory inspections and subsequent corrective actions.
Catalent's shares have fallen nearly 40% since it first disclosed manufacturing issues in April.
On Monday, however, CEO Alessandro Maselli told analysts on a conference call that he expects strong operational performance at the Maryland site, where Catalant produces raw material for mRNA-based therapies and gene therapies.
"Our financial performance will eventually follow these operational improvements," Maselli added.
Catalent reported a third-quarter loss of 9 cents per share, compared with Wall Street estimates for a loss of 3 cents, according to IBES data from Refinitiv.
The company will also amend its 2022 results filing with a $26 million deduction caused by a revenue recognition error at its Bloomington plant.
The contract drug manufacturer cut its fiscal 2024 revenue forecast to a range of $4.23 billion to $4.33 billion.
Quarterly sales of $1.04 billion beat estimates of $952.7 million.
(This story has been corrected to say Catalent does filling work only for Novo's obesity drug at the Brussels site, not Indiana site, in paragraph 5)