Charles River Laboratories Stock Ticks Higher, Tightens FY23 Outlook On Strong Q1 Performance

Charles River Laboratories International Inc CRL reported Q1 sales of $1.03 billion, an increase of 12.6% Y/Y, beating the consensus of $986.35 million.

The company reported adjusted EPS of $2.78, beating the Wall Street estimate of $2.59.

Acquisitions contributed 1.8%, and the divestiture of the Avian Vaccine business in December 2022 reduced reported revenue growth by 2.5%. The impact of foreign currency reduced reported revenue growth by 2.1%.

Organic revenue growth of 15.4% was driven by the Discovery & Safety Assessment (DSA) and Research Models & Services (RMS) business segments.

"We had a strong start to the year with a continuation of the healthy demand and pricing environment in our DSA segment, resulting in better-than-expected first quarter results. We believe that our clients have the funding to move their promising drug candidates forward, and the strength of our backlog continues to support more than one year of DSA revenue," said James Foster, Chairman, President & CEO.

Revenue for the RMS segment was $199.8 million, up 13.2% Y/Y, with Revenue for the DSA segment increased 21.7% to $662.4 million.

Guidance: Charles River Laboratories expects FY23 revenue growth of 2.0% – 4.5% vs. 1.5% – 4.5% expected earlier.

The company forecasts adjusted EPS of $9.90-$10.90 vs. prior guidance of $9.70-$10.90 and consensus of $10.24.

The company says the outlook continues to reflect the anticipated impact of Cambodian NHP supply constraints, which is expected to affect its financial results in the second half of the year.

Price Action: CRL shares are up 2.36% at $190.69 on the last check Thursday.