Charles River Laboratories (CRL) reported third quarter 2013 earnings (excluding special items) of 79 cents per share, above the Zacks Consensus Estimate of 70 cents, and up 30.1% year over year.
Charles River’s net sales increased 4.8% year over year to $292.1 million in the reported quarter, beating the Zacks Consensus Estimate of $290 million.
Foreign currency movements negatively impacted sales by 0.8% in the third quarter of 2013.
Quarter in Detail
Charles River operates through two segments – Research Models & Services (RMS) and Preclinical Services (PCS).
Sales from the RMS segment were $173.44 million in the third quarter of 2013, up 4.2% from the year-ago quarter. Foreign currency movement hurt sales by 0.9% in the reported quarter. The increase in RMS segment sales was driven primarily by the acquisitions of Vital River and Accugenix along with growth in the legacy Endotoxin and Microbial Detection (EMD) business.
Sales from the PCS segment were $118.7 million in the third quarter, up 5.8% year over year. The improvement in revenues was driven by higher sales to large biopharmaceutical as well as mid-tier clients mainly due to market share gains and improved client demand. Foreign currency movement hurt sales by 0.5% in the reported quarter.
During the third quarter of 2013, Charles River repurchased 1.4 million shares worth $65.5 million, subsequent to which the company has $66.3 million remaining under its $850 million repurchase program.
2013 Earnings Guidance Narrowed
Charles River narrowed its earnings guidance for 2013. The company now expects adjusted earnings per share between $2.85 and $2.90 per share. The Zacks Consensus Estimate of $2.83 per share is short of the company’s guidance range.
Charles River now expects sales growth of 3.0% – 3.5%, compared to the earlier estimate of 3.0% – 5.0%. On a constant currency basis, sales are expected to grow in the range of 4.0% – 4.5% compared to the earlier projected range of 4.0% –6.0%.
Currently, Charles River carries a Zacks Rank #3 (Hold). Right now, Express Scripts (ESRX), Parexel International Corporation (PRXL), and ICON Public Limited Co. (ICLR) look attractive. All three carry a Zacks Rank #2 (Buy).
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