"While I am pleased to report that we remain solidly profitable, I am not pleased to report that we did not meet the high expectations we expect from ourselves," said CEO and Chairman James Herbert. "Going forward, our higher growth should return."

Neogen said its profit decreased to $5.2 million, or 22 cents per share, from $6.1 million, or 26 cents per share. Its revenue grew 2 percent, to $44.9 million from $43.9 million.

Wall Street was looking for a per-share profit of 27 cents per share and revenue of $47.3 million, according to FactSet.

Shares of Neogen dropped $2.97 to $29.13 in midday trading.

International business has been booming recently, with quarterly net income jumping from $3 million to $4 million in 2009, to somewhere near $5 million and $6 million starting late last year. However, the percentage of revenue from international sources declined in the most recent quarter, from 43 percent, to 42 percent.

Manufacturing costs are partly to blame, the company said, as well as increased operating and marketing expenses to keep momentum going.

Gross margins were 50.5 percent in the recent quarter, compared with 51.2 percent in the same period a year ago. For the year, margins were 50.4 percent, compared with 52.1 percent last year.

Operating expenses increased by nearly 13 percent in the quarter as the company boosted its spending on sales and marketing.

Steve Quinlan, Neogen's chief financial officer, said the company is also better positioned to act when the economy rebounds.

"Our balance sheet remains strong, giving us the ability to seize opportunities as the business climate improves and pursue a wide variety of growth strategies," Quinlan said.