Charles River Labs Q3 Revenue Jumps 4% Despite Softer Client Spending, Narrows Outlook

Charles River Laboratories International Inc CRL reported third-quarter (Q3) sales of $1.03 billion, an increase of 3.8% Y/Y, beating the consensus of $1 billion.

The company reported adjusted EPS of $2.72, beating the Wall Street estimate of $2.37.

Acquisitions contributed 0.2% to consolidated third-quarter revenue growth. The impact of foreign currency translation benefited reported revenue growth by 1.4%. The divestiture of the Avian Vaccine business in December 2022 reduced reported revenue growth by 1.9%. 

Excluding the effect of these items, organic revenue growth of 4.1% was driven primarily by the Discovery and Safety Assessment and the Research Models and Services business segments.

"We were pleased that our third-quarter financial results exceeded our expectations and that some early signs of more favorable demand trends began to emerge, such as a sequential improvement in the Safety Assessment cancellation rate," CEO James Foster said. "However, we also experienced continued pressure from current client spending patterns, which began to have a discernable impact on the RMS segment and our Microbial Solutions business in the third quarter."

Guidance: Charles River Laboratories expects FY23 revenue growth of 2.5%–3.5% versus 2.5%–4.5% expected earlier.

The Wilmington, Massachusetts-based company forecasts adjusted EPS of $$10.50 – $10.70 compared to the prior guidance of $10.30–$10.90 and consensus of $10.56.

Price Action: CRL shares are up 0.30% at $183.36 on the last check Wednesday.

Now Read: Endangered Horseshoe Crabs Vital In Medical Research, Charles River Lab Commits To Enhanced Protection