Yahoo Finance Charles River (CRL) to Report Q1 Earnings: Here's What to Expect
Charles River Laboratories International, Inc. CRL is scheduled to report first-quarter 2024 results on May 9, before market open.
Earnings Surprise History
In the last reported quarter, the company’s adjusted earnings per share of $2.46 surpassed the Zacks Consensus Estimate by 2.9%. Earnings surpassed estimates in each of the trailing four quarters, the average beat being 7.07%.
Let’s take a look at how things have shaped up prior to this announcement.
Factors at Play
The sustained worldwide need for research models and related services is likely to have acted as a catalyst for the Research Models and Services (RMS) market segment. Similar to the last reported quarter, the segment probably profited from the widespread need for small research models that were present in universities, government and biopharmaceutical institutions worldwide as well as in all geographic regions.
Geographically, the current market environment is projected to constrain unit volume growth in the research model business in North America and Europe. As a result, the company aims to drive the majority of its growth through moderate price increases. In China, the company anticipates sustained strong demand for compact models and related services.
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 first quarter, driving the in-sourcing solutions business within the RMS arm.
However, the results might be offset by lower sales volume in the small model business.
Per our model, Charles River’s RMS business revenues are projected to be $199.9 million for the first quarter, flat year over year.
The Discovery and Safety Assessment (DSA) arm is likely to have benefited from growth in the Safety Assessment business through meaningful price increases and higher study volume. The strong non-NHP-related work and post-IND studies are expected to have benefited the company’s performance in the to-be-reported quarter.
In March 2024, Charles River announced a strategic partnership with Wheeler Bio. The partnership will combine Charles River’s industry-leading experience in antibody discovery services, safety and analytics with Wheeler’s Portable CMC platform to accelerate therapeutic discovery to IND submission timelines. We believe this development to have bolstered the company’s growth in the first quarter of 2024.
Charles River Laboratories International, Inc. Price and EPS Surprise
Charles River Laboratories International, Inc. price-eps-surprise | Charles River Laboratories International, Inc. Quote
We are also upbeat about the Charles River partnership agreement with Pluristyx (February 2024). The collaboration offers Charles River broad access to highly characterized and unique stem cell lines, including high-quality embryonic stem (ES) cells and induced pluripotent stem cells (iPSCs) as research tools to support the development of new therapeutics. This is likely to have had a positive impact on the company’s performance in the quarter to be reported.
However, current market conditions are soft, impacted by the overall soft biopharmaceutical demand environment. This is because clients have been reprioritizing their pipelines and tightening their R&D budgets. This might have marred growth in the first quarter.
Per our model, Charles River’s DSA business revenues are projected to be $629.8 million in the first quarter, suggesting a 4.9% decline year over year.
The Manufacturing Support segment is likely to have been driven by revenue growth across Microbial Solutions and Biologics Testing businesses. The cell and gene therapy CDMO (contract development and manufacturing organization) business has been progressing toward its targeted growth rate goal in the past few quarters. We expect this trend to have continued through the first quarter.
In March 2024, Charles River inked an AAV9 production program deal with Navega Therapeutics. The partnership with Navega Therapeutics will enable Charles River to leverage its strong AAV portfolio and leading gene therapy CDMO capabilities.
In January 2024, Charles River launched Endosafe Trillium rCR cartridges, which combine its hallmark Endosafe cartridge technology with recombinant cascade reagent (rCR). The latest launch expanded the company’s robust bacterial endotoxin testing (BET) portfolio with a new animal-free testing solution. The same month, the company launched its off-the-shelf Rep/Cap plasmid offering. Per the company, it has been designed to streamline adeno-associated virus (AAV)-based gene therapy programs. We expect these launches to have a positive contribution to the company’s first-quarter revenues, banking on strong market adoption.
Per our model, Charles River’s Manufacturing business revenues are expected to be $167.5 million for the first quarter, suggesting 0.2% growth year over year.
Q1 Estimates
The Zacks Consensus Estimate for the company’s first-quarter 2024 revenues is pegged at $997.2 million, suggesting a 3.1% decline over the year-ago reported figure.
The Zacks Consensus Estimate for the company’s first-quarter 2024 earnings per share of $2.05 indicates a 26.3% fall from the year-ago reported figure.
Price Performance
During the first quarter (ending Mar 31), shares of the company rallied 14.6% compared with the industry’s 8.2% growth.
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 a 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 0.00%. 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:
TransMedics Group TMDX has an Earnings ESP of +240.00% and a Zacks Rank #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.
TransMedics has an expected earnings growth rate of 81.8% for 2024. TMDX surpassed earnings in each of the trailing four quarters, the average being 107.83%.
Lantheus LNTH has an Earnings ESP of +4.29% and a Zacks Rank #3. The company is set to release first-quarter 2024 results on May 2.
LNTH has an expected 2024 earnings growth rate of 5.5%. The company surpassed earnings in each of the trailing four quarters, the average being 14.84%.
Insulet PODD currently has an Earnings ESP of +11.11% and a Zacks Rank #3. The company is set to release its first-quarter 2024 results on May 9.
PODD has an expected long-term earnings growth rate of 18.1% compared with the industry’s 11.4%. The company surpassed earnings in each of the trailing four quarters, the average being 100.09%.
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Charles River Laboratories International, Inc. (CRL) : Free Stock Analysis Report
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