Aceto Corporation (ACET) reported fourth quarter earnings that failed to meet analyst estimates, resulting in the stock dwindling about 8% during midday. The company posted a loss of $0.48 per share compared to $0.04 loss expected by the street. Due to the ongoing strategic review by the management, it hasn’t provided any outlook for the fiscal year 2019.
Sales in the quarter decreased 13.2% to $168.9 million, hurt by the continued pricing pressure faced by its generics business. The pricing pressure was primarily due to intense competition and $14.9 million in penalty due to failure to supply contracts from its Rising business. However, the company saw double-digit sales growth from its API and chemicals segment. Due to the slump in sales, margins fell to 5.9% compared to 18.9% reported last year.
Selling, general and administrative (SG&A) expenses jumped about 31% to $35 million, which includes $4.2 million as advisor fees. Earlier this month, Aceto inked a deal with the lenders for debt covenant waiver starting from the fourth quarter. However, it’s not stated by the company until what time period the agreement is applicable.
For the fiscal 2018 period, sales improved 11.4% aided by growth across all its segments, while the reported loss was $316 million due to increased expenses from its generics business.
Aceto is out of the S&P 600 index from October 2. The chemical company’s stock has been on a free fall plummeting nearly 77% in 2018.