WILMINGTON, Mass. - Charles River Laboratories International, Inc. (NYSE: CRL) reported a solid start to 2024, with first-quarter adjusted earnings per share (EPS) surpassing analyst estimates and a narrowed guidance range for the full year.
The company's Q1 adjusted EPS came in at $2.27, beating the consensus estimate of $2.06 by $0.21. Revenue reached $1.01 billion, also exceeding the analyst projection of $992.31 million.
Compared to the same period last year, the company's revenue saw a slight decline of 1.7% from $1.03 billion. This decrease was attributed to a 3.3% organic revenue drop, partially offset by a 0.3% benefit from foreign currency translation and a 1.5% contribution from acquisitions.
Despite the revenue decline, the Manufacturing and Research Models and Services (RMS) segments reported organic revenue growth, which was overshadowed by lower revenue in the Discovery (NASDAQ:WBD) and Safety Assessment (DSA) segment.
The company's GAAP operating margin for Q1 2024 fell to 12.5% from 16.3% in the previous year, and the adjusted operating margin also decreased to 18.5% from 21.2%. These declines were mainly due to a lower operating margin in the DSA segment and increased unallocated corporate costs.
Net income attributable to common shareholders on a GAAP basis was $67.3 million, a significant drop of 34.7% from $103.1 million in Q1 2023. The adjusted net income also saw a decrease of 17.7% from the same period last year, coming in at $117.6 million.
James C. Foster, Chair, President, and CEO, commented on the performance, "Our first-quarter performance was a solid first step towards achieving our financial outlook for the year, particularly in our Manufacturing segment."
He noted that while the DSA segment is seeing improved proposal activity and cancellations, the company's outlook remains measured, expecting demand to improve later in the year.
For FY2024, Charles River Laboratories updated its guidance, forecasting an EPS range of $10.90 to $11.40, in line with the consensus estimate of $11.02. This guidance reflects the company's anticipation of modest demand improvement in the second half of the year.
Following the earnings announcement and updated guidance, Charles River's stock saw a modest uptick of 1.1%, indicating a positive but restrained market response to the company's performance and outlook.
The company remains committed to maintaining its leadership in the non-clinical drug development sector, with initiatives to drive efficiency, invest in innovative technologies, and capitalize on new business opportunities as the biopharmaceutical industry's long-term fundamentals continue to be strong.
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