Charles River Posts Mixed Q3 Earnings; Narrows FY21 EPS Guidance

  • Charles River Laboratories International Inc CRL Q3 sales increased 20.5% Y/Y to $895.9 million, missing the consensus of $903.20 million.
  • Acquisitions contributed 5.9% to consolidated third-quarter revenue growth. Organic revenue growth was 13.6%, driven by contributions from all three business segments. 
  • Adjusted EPS reached $2.70 higher than $2.33 posted a year ago and better than the consensus of $2.58.
  • Revenue for the Research Models and Services (RMS)segment was $171.3 million, +12.7%. Organic revenue growth of 10.7% was primarily driven by robust demand for research models, particularly in China.
  • Discovery and Safety Assessment sales increased 15.3% to $531.8 million.
  • Guidance: Charles River updated its FY21 guidance after it completed the divestitures of its RMS operations in Japan and its CDMO site in Sweden.
  • The effect of these transactions will reduce revenue by nearly $20 million and an adjusted EPS by less than $0.10 in Q4 of 2021.
  • Foreign currency translation is now expected to benefit reported revenue growth by 1.5% to 2.0% in 2021, compared to the prior outlook of a 2.5% benefit.
  • The Company estimates adjusted EPS of $10.20 – $10.30 (consensus of $10.25), compared to earlier guidance of $10.10 – $10.35.
  • Price Action: CRL shares are down 10.8% at $385.21 during the market session on the last check Wednesday.
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