Unlock Premium Data: Up to 50% Off InvestingProCLAIM SALE

Fortrea shares tumble after Q4 results despite revenue beat

EditorRachael Rajan
Published 2024-03-11, 07:44 a/m
© Reuters.
FTRE
-

DURHAM, N.C. - Fortrea Holdings Inc (NASDAQ:FTRE), a prominent global contract research organization, disclosed its financial results for the fourth quarter and full year ended December 31, 2023. Despite surpassing revenue expectations, the company's shares plummeted nearly 10% following the report.

For the fourth quarter, Fortrea reported revenues of $775.4 million, a slight increase from $761.7 million in the same quarter the previous year, and above the analyst consensus of $768.3 million. However, the company experienced a GAAP net loss of $36.0 million, or -$0.41 per diluted share, a stark contrast to the net income of $33.4 million, or $0.38 per share, reported in Q4 of 2022. The adjusted EBITDA for the quarter was $67.2 million, down from $109.8 million YoY.

Tom Pike, Fortrea's chairman and CEO, acknowledged the company's transformation in the latter half of 2023 and expressed confidence in delivering excellent results for customers while improving financial outcomes in the medium and longer term. The company's book-to-bill ratio was 1.30x for the quarter, reflecting a strong demand for its services.

Looking ahead to 2024, Fortrea has set revenue targets ranging from $3,140 million to $3,205 million and adjusted EBITDA guidance between $280 million and $320 million. The guidance assumes foreign exchange rates as of the end of 2023 remain constant throughout the forecast period.

The company also announced the planned divestiture of its Endpoint Clinical and Fortrea Patient Access businesses to Arsenal Capital Partners, with a purchase price of $345 million, subject to adjustments. This transaction is expected to close in the second quarter of 2024.

Despite the revenue beat and strategic divestitures, investor sentiment appeared to be affected by the reported net loss and the significant decrease in adjusted EBITDA. The nearly 10% decline in Fortrea's stock price reflects market concerns over the company's profitability and future performance.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.