We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Why Is Charles River (CRL) Down 5.3% Since Last Earnings Report?
Read MoreHide Full Article
It has been about a month since the last earnings report for Charles River Laboratories (CRL - Free Report) . Shares have lost about 5.3% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Charles River due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Charles River Q2 Earnings Beat, View Down
Charles River reported second-quarter 2024 adjusted earnings per share of $2.80, which increased 4.1% year over year. The figure surpassed the Zacks Consensus Estimate by 17.2%.
On a GAAP basis, earnings declined 7.9% year over year to $1.74 per share.
Revenues
Revenues totaled $1.03 billion, in line with the Zacks Consensus Estimate. However, the top line declined 2.8% from the year-ago quarter’s level (down 3.2% organically, excluding the impact of acquisition, divestiture and foreign currency translation).
Segments in Detail
RMS’ revenues of $206.4 million were down 1.7% year over year (down 3.9% organically). The organic decrease in revenues was primarily due to lower revenues from non-human primates (NHPs) in China as well as research model services and the Cell Solutions business. Our model estimated RMS business revenues to be $194.2 million in the second quarter.
DSA’s revenues of $627.4 million fell 5.4% year over year (down 5% organically). The organic decline in revenues was mainly due to lower revenues from both the Discovery Services and Safety Assessment businesses, which included a difficult, prior-year growth comparison in the Safety Assessment business. Our model projected revenues of $637.7 million for this segment.
Manufacturing Solutions’ revenues totaled $192.3 million, up 3.1% year over year (up 3.7% organically). Organic revenue growth reflected higher revenues across all segments, led by the CDMO business. For the second quarter, our model projected revenues to be $191.3 million.
Margins
The gross profit in the reported quarter was $353.7 million, down 11.3% from the prior-year quarter’s level. The gross margin of 34.5% contracted 317 basis points (bps) year over year, with a 1.7% rise in the total cost of the company.
Selling, general & administrative expenses decreased 15% year over year to $169.8 million. Adjusted operating income totaled $183.9 million, reflecting a 7.7% decline from the prior-year quarter’s level. The adjusted operating margin contracted 87 bps to 17.9%.
Liquidity and Cash Position
Charles River exited the second quarter with cash and cash equivalents of $179.2 million compared with $327 million at the end of the first quarter.
Cumulative net cash provided by operating activities at the end of the second quarter was $323.4 million compared with $257.5 million at the end of second-quarter 2023.
2024 Guidance
Charles River has lowered its guidance for the year.
CRL now expects total revenues to decrease 4.5-2.5% (earlier guidance for revenue growth was in the band of 1-4%) on a reported basis. The Zacks Consensus Estimate for the company’s 2024 revenues is pegged at $4.21 billion.
Adjusted earnings per share for 2024 is now expected to be in the range of $9.90-$10.20 (down from the previously projected range of $10.90-$11.40). The Zacks Consensus Estimate for the metric is pegged at $10.99.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates.
The consensus estimate has shifted -19.52% due to these changes.
VGM Scores
Currently, Charles River has an average Growth Score of C, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Charles River has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.
Performance of an Industry Player
Charles River is part of the Zacks Medical Services industry. Over the past month, Avantor, Inc. (AVTR - Free Report) , a stock from the same industry, has gained 2.6%. The company reported its results for the quarter ended June 2024 more than a month ago.
Avantor reported revenues of $1.7 billion in the last reported quarter, representing a year-over-year change of -2.4%. EPS of $0.25 for the same period compares with $0.28 a year ago.
For the current quarter, Avantor is expected to post earnings of $0.25 per share, indicating no change from the year-ago quarter. The Zacks Consensus Estimate has changed -0.4% over the last 30 days.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Avantor. Also, the stock has a VGM Score of C.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Why Is Charles River (CRL) Down 5.3% Since Last Earnings Report?
It has been about a month since the last earnings report for Charles River Laboratories (CRL - Free Report) . Shares have lost about 5.3% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Charles River due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Charles River Q2 Earnings Beat, View Down
Charles River reported second-quarter 2024 adjusted earnings per share of $2.80, which increased 4.1% year over year. The figure surpassed the Zacks Consensus Estimate by 17.2%.
On a GAAP basis, earnings declined 7.9% year over year to $1.74 per share.
Revenues
Revenues totaled $1.03 billion, in line with the Zacks Consensus Estimate. However, the top line declined 2.8% from the year-ago quarter’s level (down 3.2% organically, excluding the impact of acquisition, divestiture and foreign currency translation).
Segments in Detail
RMS’ revenues of $206.4 million were down 1.7% year over year (down 3.9% organically). The organic decrease in revenues was primarily due to lower revenues from non-human primates (NHPs) in China as well as research model services and the Cell Solutions business. Our model estimated RMS business revenues to be $194.2 million in the second quarter.
DSA’s revenues of $627.4 million fell 5.4% year over year (down 5% organically). The organic decline in revenues was mainly due to lower revenues from both the Discovery Services and Safety Assessment businesses, which included a difficult, prior-year growth comparison in the Safety Assessment business. Our model projected revenues of $637.7 million for this segment.
Manufacturing Solutions’ revenues totaled $192.3 million, up 3.1% year over year (up 3.7% organically). Organic revenue growth reflected higher revenues across all segments, led by the CDMO business. For the second quarter, our model projected revenues to be $191.3 million.
Margins
The gross profit in the reported quarter was $353.7 million, down 11.3% from the prior-year quarter’s level. The gross margin of 34.5% contracted 317 basis points (bps) year over year, with a 1.7% rise in the total cost of the company.
Selling, general & administrative expenses decreased 15% year over year to $169.8 million. Adjusted operating income totaled $183.9 million, reflecting a 7.7% decline from the prior-year quarter’s level. The adjusted operating margin contracted 87 bps to 17.9%.
Liquidity and Cash Position
Charles River exited the second quarter with cash and cash equivalents of $179.2 million compared with $327 million at the end of the first quarter.
Cumulative net cash provided by operating activities at the end of the second quarter was $323.4 million compared with $257.5 million at the end of second-quarter 2023.
2024 Guidance
Charles River has lowered its guidance for the year.
CRL now expects total revenues to decrease 4.5-2.5% (earlier guidance for revenue growth was in the band of 1-4%) on a reported basis. The Zacks Consensus Estimate for the company’s 2024 revenues is pegged at $4.21 billion.
Adjusted earnings per share for 2024 is now expected to be in the range of $9.90-$10.20 (down from the previously projected range of $10.90-$11.40). The Zacks Consensus Estimate for the metric is pegged at $10.99.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates.
The consensus estimate has shifted -19.52% due to these changes.
VGM Scores
Currently, Charles River has an average Growth Score of C, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Charles River has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.
Performance of an Industry Player
Charles River is part of the Zacks Medical Services industry. Over the past month, Avantor, Inc. (AVTR - Free Report) , a stock from the same industry, has gained 2.6%. The company reported its results for the quarter ended June 2024 more than a month ago.
Avantor reported revenues of $1.7 billion in the last reported quarter, representing a year-over-year change of -2.4%. EPS of $0.25 for the same period compares with $0.28 a year ago.
For the current quarter, Avantor is expected to post earnings of $0.25 per share, indicating no change from the year-ago quarter. The Zacks Consensus Estimate has changed -0.4% over the last 30 days.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Avantor. Also, the stock has a VGM Score of C.