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Charles River (CRL) to Report Q2 Earnings: What's in Store?
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Charles River Laboratories International, Inc. (CRL - Free Report) is scheduled to report second-quarter 2022 results on Aug 3, before market open.
In the last reported quarter, the company’s adjusted earnings per share of $2.75 surpassed the Zacks Consensus Estimate by 1.48%. Earnings surpassed estimates in each of the trailing four quarters, the average beat being 4.66%.
Let’s take a look at how things have shaped up prior to this announcement.
Factors at Play
The Research Models and Services (RMS) segment is likely to have gained from continued global demand for research models and associated services. The company’s ongoing initiatives to boost operating performances by HemaCare and Cellero are anticipated to have had a beneficial impact on the cell supply business.
The ongoing broad-based demand and meaningful price increases in the Research Model business, particularly in North America and China, driven by increased research activities in these geographies are expected to have contributed to the top line in Q2. However,an adverse impact related to China's COVID restrictions through the months of Q2 are likely to have disrupted RMS revenues.
Meanwhile, the company’s cradle initiative for small and large biopharmaceutical clients is anticipated to have maintained its growth momentum, benefiting the in-sourcing solutions business within the RMS arm.
The Discovery and Safety Assessment (DSA) arm is likely to have benefited from a strong biotechnology client base and robust backlog at the end of 2021.
Charles River Laboratories International, Inc. Price and EPS Surprise
Within the DSA arm, the Safety Assessment business has been witnessing strong demand and price increases. Per the last-reported first-quarter earnings update, the company noted that the DSA organic growth rate improved nearly 300 basis points from the fourth quarter level, driven by the strong performance of the Safety Assessment business. The company expects growth to improve in the low double digits in the second quarter, banking onstrong business trends with higher pricing and increased demand within the Safety Assessment business.
Further, withthe staff-related scenario getting stabilized, Charles River expects recent hires to help the company meet the accelerating DSA growth outlook over the course of 2022. This should get reflected in the Q2 results itself.
The Discovery business is likely to have gained from continued strong performances by early discovery and CNS services. Of late, Charles River has been witnessing growing client interest in integrated drug discovery programs. To meet the robust client demand for Discovery Services, the company has been closely managing staffing levels and introducing cutting-edge capabilities. The company has also been consistently expanding its discovery portfolio through strategic partnerships and acquisitions. We expect these ongoing business trends and initiatives to have fueled growth during the second quarter.
The Manufacturing Support segment is likely to have been driven by revenue growth across the Microbial Solutions and Biologics Testing Solutions businesses. The company has been recording strong demand across its portfolio of critical quality control testing solutions within the Microbial Solutions business. Meanwhile, we anticipate the continued uptake of cell and gene therapy testing services for the Biologics Testing Solutions business to have driven revenues in the to-be-reported quarter.
Q2 Estimates
The Zacks Consensus Estimate for the company’s second-quarter 2022 revenues is pegged at $1.0 billion, suggesting a 9.7% rise over the year-ago reported figure.
The Zacks Consensus Estimate for the company’s second-quarter 2022 earnings per share of $2.76 indicates a 5.8% uptick from the year-ago reported figure.
What Our Model Suggests
Per our proven model, a stock with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) along with a positive Earnings ESP has higher chances of beating estimates. However, this is not the case here, as you can see:
Earnings ESP: The company has an Earnings ESP of -0.27%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: The company currently carries a Zacks Rank #4 (Sell).
Stocks Worth a Look
Here are a few stocks worth considering, as these have the right combination of elements to beat on earnings this reporting cycle.
BrainsWay’s 2023 earnings growth rate is estimated to be 16.7%. BWAY’s 2023 revenues are expected to growth 17.1% from 2022.
Alcon Inc. (ALC - Free Report) has an Earnings ESP of +5.07% and a Zacks Rank of #2.
Alcon long-term earnings growth rate is estimated at 14.3%. ALC’s earnings yield of 3.41% compares favorably with the industry’s (8.09%).
Glaukos Corporation (GKOS - Free Report) currently has an Earnings ESP of +2.27% and a Zacks Rank of #1. Glaukosis scheduled torelease second-quarter 2022 results on Aug 3.
GKOS’ 2023 earnings growth rate is estimated at 15.2%.
Image: Bigstock
Charles River (CRL) to Report Q2 Earnings: What's in Store?
Charles River Laboratories International, Inc. (CRL - Free Report) is scheduled to report second-quarter 2022 results on Aug 3, before market open.
In the last reported quarter, the company’s adjusted earnings per share of $2.75 surpassed the Zacks Consensus Estimate by 1.48%. Earnings surpassed estimates in each of the trailing four quarters, the average beat being 4.66%.
Let’s take a look at how things have shaped up prior to this announcement.
Factors at Play
The Research Models and Services (RMS) segment is likely to have gained from continued global demand for research models and associated services. The company’s ongoing initiatives to boost operating performances by HemaCare and Cellero are anticipated to have had a beneficial impact on the cell supply business.
The ongoing broad-based demand and meaningful price increases in the Research Model business, particularly in North America and China, driven by increased research activities in these geographies are expected to have contributed to the top line in Q2. However,an adverse impact related to China's COVID restrictions through the months of Q2 are likely to have disrupted RMS revenues.
Meanwhile, the company’s cradle initiative for small and large biopharmaceutical clients is anticipated to have maintained its growth momentum, benefiting the in-sourcing solutions business within the RMS arm.
The Discovery and Safety Assessment (DSA) arm is likely to have benefited from a strong biotechnology client base and robust backlog at the end of 2021.
Charles River Laboratories International, Inc. Price and EPS Surprise
Charles River Laboratories International, Inc. price-eps-surprise | Charles River Laboratories International, Inc. Quote
Within the DSA arm, the Safety Assessment business has been witnessing strong demand and price increases. Per the last-reported first-quarter earnings update, the company noted that the DSA organic growth rate improved nearly 300 basis points from the fourth quarter level, driven by the strong performance of the Safety Assessment business. The company expects growth to improve in the low double digits in the second quarter, banking onstrong business trends with higher pricing and increased demand within the Safety Assessment business.
Further, withthe staff-related scenario getting stabilized, Charles River expects recent hires to help the company meet the accelerating DSA growth outlook over the course of 2022. This should get reflected in the Q2 results itself.
The Discovery business is likely to have gained from continued strong performances by early discovery and CNS services. Of late, Charles River has been witnessing growing client interest in integrated drug discovery programs. To meet the robust client demand for Discovery Services, the company has been closely managing staffing levels and introducing cutting-edge capabilities. The company has also been consistently expanding its discovery portfolio through strategic partnerships and acquisitions. We expect these ongoing business trends and initiatives to have fueled growth during the second quarter.
The Manufacturing Support segment is likely to have been driven by revenue growth across the Microbial Solutions and Biologics Testing Solutions businesses. The company has been recording strong demand across its portfolio of critical quality control testing solutions within the Microbial Solutions business. Meanwhile, we anticipate the continued uptake of cell and gene therapy testing services for the Biologics Testing Solutions business to have driven revenues in the to-be-reported quarter.
Q2 Estimates
The Zacks Consensus Estimate for the company’s second-quarter 2022 revenues is pegged at $1.0 billion, suggesting a 9.7% rise over the year-ago reported figure.
The Zacks Consensus Estimate for the company’s second-quarter 2022 earnings per share of $2.76 indicates a 5.8% uptick from the year-ago reported figure.
What Our Model Suggests
Per our proven model, a stock with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) along with a positive Earnings ESP has higher chances of beating estimates. However, this is not the case here, as you can see:
Earnings ESP: The company has an Earnings ESP of -0.27%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: The company currently carries a Zacks Rank #4 (Sell).
Stocks Worth a Look
Here are a few stocks worth considering, as these have the right combination of elements to beat on earnings this reporting cycle.
BrainsWay Ltd. (BWAY - Free Report) has an Earnings ESP of +33.33% and a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.
BrainsWay’s 2023 earnings growth rate is estimated to be 16.7%. BWAY’s 2023 revenues are expected to growth 17.1% from 2022.
Alcon Inc. (ALC - Free Report) has an Earnings ESP of +5.07% and a Zacks Rank of #2.
Alcon long-term earnings growth rate is estimated at 14.3%. ALC’s earnings yield of 3.41% compares favorably with the industry’s (8.09%).
Glaukos Corporation (GKOS - Free Report) currently has an Earnings ESP of +2.27% and a Zacks Rank of #1. Glaukosis scheduled torelease second-quarter 2022 results on Aug 3.
GKOS’ 2023 earnings growth rate is estimated at 15.2%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.