Charles River Laboratories International Inc.
) reported second quarter 2012 earnings (excluding special items)
of 75 cents per share, beating the Zacks Consensus Estimate of 67
cents. Earnings were 7.1% above the year-ago earnings of 70 cents.
Earnings were boosted by a lower share count.
The company's quarterly net sales of $284.7 million decreased 1.2%
year over year. Negative currency movement impacted revenues by
3.1% in the second quarter of 2012. Net sales were below the Zacks
Consensus Estimate of $287 million.
Quarter in Detail
Charles River operates through two segments - Research Models &
Services (RMS) and Preclinical Services (PCS).
Revenue from the RMS segment was $173.6 million in the second
quarter, down 2.6% from the prior-year period. Excluding the 3.8%
loss from currency translations, RMS segment revenue inched up 1.2%
year over year. On a sequential basis, revenues were down 5.2% due
to lower research model sales in Europe and Japan and the negative
Revenue from the PCS segment was $111.1 million in the second
quarter, up 0.9% from the prior-year period (up 3.0% on constant
currency basis). Sequentially, sales were up 8.1% driven by higher
demand for biopharmaceutical services (BPS) and regulated safety
During the second quarter of 2012, Charles River repurchased shares
worth $15.3 million (approximately 458,000 shares) and has $88.5
million remaining under its $750 million repurchase program. The
company expects to buy back 1 million - 2 million shares in 2012.
Outlook for 2012
Charles River trimmed its 2012 net sales guidance as it expects
foreign exchange translations to negatively impact sales by 2%
compared to 1% expected earlier. The year-over-year change in net
sales is now expected in the range of -1% to 1% (previous guidance:
0% - 2%). The company maintained its net sales growth outlook on a
constant currency basis in the range of 1% - 3%.
Charles River lifted its 2012 adjusted earnings guidance to
$2.63-$2.73 per share (previous guidance: $2.60 -$2.70 per share).
The Zacks Consensus Estimate of $2.68 per share is within the
company's guidance range.
The company expects seasonal factors to affect RMS segment sales in
the latter half of the year, resulting in slightly lower sales
compared to the first half. The company expects PCS segment sales
to decline slightly in the remaining two quarters of 2012 as
compared to the second quarter.
We currently have a Neutral recommendation on Charles River. The
stock carries a Zacks #3 Rank, which translates into a short-term
CHARLES RVR LAB (CRL): Free Stock Analysis
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