Charles River Laboratories International Inc (NYSE:CRL) reported a 3.8% rise in Q3 revenue to $1.03 billion today, exceeding expectations despite a decrease in GAAP earnings per share by 10.1% to $1.69 due to site consolidation costs and increased interest expense. The company's non-GAAP earnings per share, however, saw an uptick of 3.4% to $2.72.
The firm attributed its organic revenue growth of 4.1% to the strong performance of its DSA and RMS business segments. The RMS segment witnessed a revenue increase of 3.7% to $186.8 million, while the DSA segment jumped by 7.2% to reach $664.0 million.
However, not all segments performed equally, as the Manufacturing segment's revenue dipped by 7.3% to $175.7 million. The financial results were also impacted by the divestiture of the Avian Vaccine business and foreign currency translation.
Current client spending patterns presented challenges, particularly affecting the RMS segment and the Microbial Solutions business.
In light of these results, CRL updated its financial guidance for 2023. The company narrowed its projected revenue growth range to between 2.5% and 3.5%. It also adjusted its non-GAAP EPS estimate to range between $10.50 and $10.70, indicating a shift in financial results' gating in H2 2023.
James C. Foster, Chairman, President, and CEO of Charles River Laboratories, expressed satisfaction with the Q3 results that surpassed expectations, and noted early signs of more favorable demand trends.
InvestingPro Insights
As per InvestingPro's real-time data, Charles River Laboratories (CRL) has a market capitalization of $8990M and an adjusted P/E ratio of 24.24 as of Q2 2023. The company's revenue growth for the same period stands at 13.29%, indicating a healthy financial status. Furthermore, the company's 1-week price total return as of the end of 2023 is 8.27%, showing a significant return over the last week.
InvestingPro Tips suggest that CRL's revenue growth has been accelerating and the company has been consistently increasing earnings per share. These factors, along with the recent financial performance, align with the company's growth trajectory. On the other hand, the company's high P/E ratio relative to near-term earnings growth suggests that the company's stock is trading at a high price relative to its earnings, which could be a potential risk for investors.
InvestingPro offers numerous additional tips and insights for investors interested in CRL and other stocks. These include detailed financial analysis, market trends, and investment strategies to help investors make informed decisions.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.