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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