Shares of Novanta (NOVT), a life-sciences equipment manufacturer, plummeted 17.45% in pre-market trading on Tuesday following the company's first-quarter earnings report and cautionary outlook due to global trade disruptions. Despite reporting improved Q1 results, the company's warnings about potential sales impacts from tariffs and announcement of significant cost-cutting measures have sparked investor concerns.

Novanta reported a consolidated net income of $21.2 million for Q1 2025, up from $14.7 million in the same period last year. Revenue saw a modest 1.1% increase to $233.4 million. However, the company's forward-looking statements have raised red flags for investors. CEO Matthijs Glastra cited "limited visibility of rapid trade policy changes" and "heightened uncertainty caused by global trade disruptions" as factors making long-term revenue predictions challenging beyond the second quarter.

In response to these challenges, Novanta announced plans for "cost containment actions" aimed at reducing annual costs by $20 million. This move, coupled with the company's cautious Q2 guidance of adjusted earnings between $0.68 and $0.78 per share on revenue of $230-240 million, suggests that Novanta is bracing for potential headwinds. The market's sharp negative reaction indicates that investors are wary of the company's ability to navigate the complex trade environment and maintain growth in the face of these challenges, leading to the significant pre-market decline.