Fortrea Holdings Inc. reported significant financial changes in its 10-Q filing for the quarter ending September 30, 2024. The company, which operates as a global contract research organization (CRO), experienced a decline in revenues, profitability, and total assets compared to the previous fiscal period.

For the three months ended September 30, 2024, Fortrea generated revenues of $674.9 million, a decrease of 5.4% from $713.8 million in the same period of 2023. The nine-month revenue also fell to $1,999.4 million, down 6.3% from $2,132.8 million year-over-year. This decline was attributed to a 5.7% drop in organic revenues, primarily due to reduced service revenues and lower pass-through costs, partially offset by favorable foreign currency translation.

The company's total current assets decreased to $936.9 million from $1,250.8 million at the end of 2023, while total assets fell to $3,663.7 million from $4,332.6 million. Total liabilities also decreased to $2,150.2 million from $2,618.5 million, and long-term debt was reported at $1,124.5 million, down from $1,565.9 million.

Fortrea's operating performance showed a marked decline, with an operating loss of $(18.0) million for the three months ended September 30, 2024, compared to an operating income of $10.3 million in the same period of 2023. For the nine months, the operating loss was $(106.3) million, a stark contrast to the operating income of $56.0 million reported in the previous year. The net loss for the three months was $(27.9) million, compared to $(14.0) million in 2023, while the nine-month net loss ballooned to $(267.3) million from a net income of $29.3 million.

The company also reported increased selling, general, and administrative expenses, which rose by 27.6% for the three months and 28.4% for the nine months, primarily due to higher professional fees and costs associated with exiting the Transition Services Agreement with Labcorp.

Strategically, Fortrea has undergone significant restructuring, including the sale of its Enabling Services Segment for $340.0 million, which closed in Q2 2024. This transaction resulted in the classification of the segment's assets and liabilities as discontinued operations. The company is also actively addressing identified material weaknesses in its internal controls and has implemented a comprehensive remediation plan.

As of September 30, 2024, Fortrea's backlog stood at $7.6 billion, reflecting anticipated future revenue from ongoing business awards. The company continues to navigate challenges while focusing on its core clinical services segment.