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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 expected to report second-quarter 2023 results on Aug 9.
In the last reported quarter, the company’s adjusted earnings per share of $2.78 surpassed the Zacks Consensus Estimate by 8.4%. Earnings surpassed estimates in each of the trailing four quarters, the average beat being 7.3%.
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 the continued global demand for research models and associated services. Similar to the last reported quarter, the segment is likely to have benefited from broad-based demand for small research models in all geographic regions, for Research Model Services and for the Cell Solutions business. In North America and Europe, revenue growth for small research models is expected to have been driven by healthy volume increases in North America and continued pricing gains globally, thus adding to the top line.
The company’s CRADLE or Charles River Accelerator and Development Labs initiative and research models in North America and China, including last year’s Explora acquisition, are anticipated to have maintained its growth momentum in the second quarter, driving the in-sourcing solutions business within the RMS arm.
Per the first-quarter update, Charles River expanded its GEMS business in North America to address increasing demand from biopharmaceutical and academic clients. We believe this development to have contributed to company’s growth in the to-be-reported quarter.
Per our model, Charles River’s RMS’ business revenues are projected at $203.5 million for the second quarter, suggesting a 9.2% increase year over year.
The Discovery and Safety Assessment (DSA) arm is likely to have benefited from growth in the Safety Assessment business on meaningful price increases and higher study volume. The broad-based and sustained client demand across its Safety Assessment business is expected to have benefited the company’s performance in the to-be-reported quarter.
Charles River Laboratories International, Inc. Price and EPS Surprise
Per first-quarter earnings update, Charles River stated that its client base is stable and resilient and the biotech clients continued to send new programs. These factors are expected to have contributed to the company’s second-quarter performance. The company also noted that 14 new drugs were approved by the FDA. We believe the new drug pipeline to provide ample future growth opportunities, thus contributing to the company’s revenues in the fiscal second quarter.
Per our model, Charles River’s DSA’s business revenues are projected at $629 million in Q2, a 6.3% growth year over year.
The Manufacturing Support segment is likely to have been driven by revenue growth across the Microbial Solutions. The company has been recording the continued strength of the Accugenix microbial identification platform on instrument placements and demand for testing services within the Microbial Solutions business. Further, the cell and gene therapy CDMO business continued progressing toward its targeted growth rate goal in the past few quarters. We believe this trend to have continued through the second quarter as well, thus adding to the top line.
In May 2023, Charles River launched Accugenix Next Generation Sequencing for Bacterial Identification and Fungal Identification. Recently, the company also entered into partnerships with MPL - Mikrobiologisches Prüflabor (Austria) and Sure Laboratories (The Netherlands) to provide regional access to rapid, accurate microbial identifications to the industrial microbiology market, including pharmaceutical, biopharmaceutical, personal care and other global manufacturing industries. We believe these major developments to have contributed to the company’s growth in the to-be-reported quarter.
Per our model, Charles River’s Manufacturing business revenues are projected at $199.4 million for the second quarter, suggesting a 2.4% growth year over year.
Q2 Estimates
The Zacks Consensus Estimate for the company’s second-quarter 2023 revenues is pegged at $1.05 billion, suggesting an 7.7% rise over the year-ago reported figure.
The Zacks Consensus Estimate for the company’s second-quarter 2023 earnings per share of $2.63 indicates a 5.1% fall 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) and 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 -1.41%. 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 #3.
Stocks Worth a Look
Here are some medical stocks worth considering as these have the right combination of elements to post an earnings beat this quarter.
PDCO has an expected earnings growth rate of 6% for 2024. PDCO’s 2023 projected revenues of $6.72 billion indicate an increase of 3.8 the year-ago reported figure.
Dentsply Sirona (XRAY - Free Report) has an Earnings ESP of +3.39% and a Zacks Rank of #2. Dentsply Sirona is scheduled to release second-quarter fiscal 2023 results on Aug 3.
XRAY’s earnings surpassed estimates in two of the trailing four quarters and missed the same in the other, the average beat being 10.47%. XRAY’s long-term expected growth rate is estimated to be 9.3%.
SiBone (SIBN - Free Report) has an Earnings ESP of +12.2% and a Zacks Rank #1. SiBone is scheduled to release second-quarter 2023 results on Aug 7.
SIBN’s earnings surpassed estimates in three of the trailing four quarters and missed the same once, with the average surprise being 11.11%. The Zacks Consensus Estimate for SIBN’s second-quarter EPS indicates a 22.2% improvement from the year-ago reported figure.
Image: Bigstock
Charles River (CRL) to Report Q2 Earnings: What's in Store?
Charles River Laboratories International, Inc. (CRL - Free Report) is expected to report second-quarter 2023 results on Aug 9.
In the last reported quarter, the company’s adjusted earnings per share of $2.78 surpassed the Zacks Consensus Estimate by 8.4%. Earnings surpassed estimates in each of the trailing four quarters, the average beat being 7.3%.
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 the continued global demand for research models and associated services. Similar to the last reported quarter, the segment is likely to have benefited from broad-based demand for small research models in all geographic regions, for Research Model Services and for the Cell Solutions business.
In North America and Europe, revenue growth for small research models is expected to have been driven by healthy volume increases in North America and continued pricing gains globally, thus adding to the top line.
The company’s CRADLE or Charles River Accelerator and Development Labs initiative and research models in North America and China, including last year’s Explora acquisition, are anticipated to have maintained its growth momentum in the second quarter, driving the in-sourcing solutions business within the RMS arm.
Per the first-quarter update, Charles River expanded its GEMS business in North America to address increasing demand from biopharmaceutical and academic clients. We believe this development to have contributed to company’s growth in the to-be-reported quarter.
Per our model, Charles River’s RMS’ business revenues are projected at $203.5 million for the second quarter, suggesting a 9.2% increase year over year.
The Discovery and Safety Assessment (DSA) arm is likely to have benefited from growth in the Safety Assessment business on meaningful price increases and higher study volume. The broad-based and sustained client demand across its Safety Assessment business is expected to have benefited the company’s performance in the to-be-reported quarter.
Charles River Laboratories International, Inc. Price and EPS Surprise
Charles River Laboratories International, Inc. price-eps-surprise | Charles River Laboratories International, Inc. Quote
Per first-quarter earnings update, Charles River stated that its client base is stable and resilient and the biotech clients continued to send new programs. These factors are expected to have contributed to the company’s second-quarter performance. The company also noted that 14 new drugs were approved by the FDA. We believe the new drug pipeline to provide ample future growth opportunities, thus contributing to the company’s revenues in the fiscal second quarter.
Per our model, Charles River’s DSA’s business revenues are projected at $629 million in Q2, a 6.3% growth year over year.
The Manufacturing Support segment is likely to have been driven by revenue growth across the Microbial Solutions. The company has been recording the continued strength of the Accugenix microbial identification platform on instrument placements and demand for testing services within the Microbial Solutions business. Further, the cell and gene therapy CDMO business continued progressing toward its targeted growth rate goal in the past few quarters. We believe this trend to have continued through the second quarter as well, thus adding to the top line.
In May 2023, Charles River launched Accugenix Next Generation Sequencing for Bacterial Identification and Fungal Identification. Recently, the company also entered into partnerships with MPL - Mikrobiologisches Prüflabor (Austria) and Sure Laboratories (The Netherlands) to provide regional access to rapid, accurate microbial identifications to the industrial microbiology market, including pharmaceutical, biopharmaceutical, personal care and other global manufacturing industries. We believe these major developments to have contributed to the company’s growth in the to-be-reported quarter.
Per our model, Charles River’s Manufacturing business revenues are projected at $199.4 million for the second quarter, suggesting a 2.4% growth year over year.
Q2 Estimates
The Zacks Consensus Estimate for the company’s second-quarter 2023 revenues is pegged at $1.05 billion, suggesting an 7.7% rise over the year-ago reported figure.
The Zacks Consensus Estimate for the company’s second-quarter 2023 earnings per share of $2.63 indicates a 5.1% fall 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) and 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 -1.41%. 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 #3.
Stocks Worth a Look
Here are some medical stocks worth considering as these have the right combination of elements to post an earnings beat this quarter.
Patterson Companies (PDCO - Free Report) has an Earnings ESP of +1.47% and a Zacks Rank of 1. The company is expected to release first-quarter 2024 results soon. You can see the complete list of today’s Zacks #1 Rank stocks here.
PDCO has an expected earnings growth rate of 6% for 2024. PDCO’s 2023 projected revenues of $6.72 billion indicate an increase of 3.8 the year-ago reported figure.
Dentsply Sirona (XRAY - Free Report) has an Earnings ESP of +3.39% and a Zacks Rank of #2. Dentsply Sirona is scheduled to release second-quarter fiscal 2023 results on Aug 3.
XRAY’s earnings surpassed estimates in two of the trailing four quarters and missed the same in the other, the average beat being 10.47%. XRAY’s long-term expected growth rate is estimated to be 9.3%.
SiBone (SIBN - Free Report) has an Earnings ESP of +12.2% and a Zacks Rank #1. SiBone is scheduled to release second-quarter 2023 results on Aug 7.
SIBN’s earnings surpassed estimates in three of the trailing four quarters and missed the same once, with the average surprise being 11.11%. The Zacks Consensus Estimate for SIBN’s second-quarter EPS indicates a 22.2% improvement from the year-ago reported figure.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.