Earnings Beat for CRL, Maintains View - Analyst Blog

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Charles River Laboratories International Inc. ( CRL ) reported first quarter 2012 earnings (excluding special items) of 70 cents per share, above the Zacks Consensus Estimate of 65 cents, and 14.8% above the year-ago earnings of 61 cents. Earnings were boosted by a lower share count.  

The company's quarterly revenue of $286 million remained flat year over year. Higher sales in Research Models and Services (RMS) segment was offset by a decline in Preclinical Services (PCS) segment sales and foreign exchange (Fx) translation. Revenues came in line with the Zacks Consensus Estimate.

Quarter in Detail

Charles Riveroperates through two segments - RMS and PCS.

Revenue from the RMS segment was $183.2 million in the first quarter, up 5.6% from the prior-year period. Segment revenue was boosted by strong sales of In Vitro and Avian products and RMS services. Excluding the 0.9% loss from Fx, RMS segment revenue moved up 6.5% year over year.

Revenue from the PCS segment was $102.8 million in the first quarter, down 8.6% from the prior-year period (down 7.6% excluding the negative impact of Fx). Unfavorable sales mix and lower biopharmaceutical services (BPS) sales adversely affected revenue performance.

During the first quarter of 2012, Charles River repurchased shares worth $12.5 million and has $103.8 million remaining under its $750 million repurchase program.

Outlook for 2012

Charles River reiterated its 2012 adjusted earnings guidance range of $2.60-$2.70 per share, provided earlier in December 2011. The Zacks Consensus Estimate of $2.68 per share is toward the higher end of the company's guidance range. Net sales are expected to grow in the range of 0% - 2%, with a negative Fx impact of approximately 1%.

Our Recommendation

We currently have a Neutral recommendation on Charles River. The stock carries a Zacks #3 Rank, which translates into a short-term Hold rating.

Despite the consistent performance of the RMS segment, the PCS business fails to show any definite sign of recovery, thus keeping us on the sidelines.


 
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Stocks

Referenced Stocks: BPS , CRL , PCS

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