Earnings Beat for CRL, Maintains View - Analyst Blog

By Zacks Equity Research,

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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.

CHARLES RVR LAB (CRL): Free Stock Analysis Report
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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 Nasdaq, Inc.

This article appears in: Investing , Business , Stocks
Referenced Stocks: BPS , CRL , PCS

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