CRL Stock Down Despite Q4 Earnings & Revenue Beat, Margins Rise

Charles River Laboratories International, Inc. CRL reported fourth-quarter 2025 adjusted earnings per share (EPS) of $2.39, down 10.2% year over year. The figure surpassed the Zacks Consensus Estimate by 2.51%.

On a GAAP basis, the company reported a loss of $5.62 per share compared with the year-ago quarter’s loss of $4.22.

The company reported a full-year 2025 EPS of $10.28, which decreased 0.4% from the prior-year level. The figure outpaced the Zacks Consensus Estimate by 0.6%.

CRL’s Revenues

Revenues totaled $994.2 million, which beat the Zacks Consensus Estimate by 0.84%. The top line fell 0.8% from the year-ago quarter’s level (down 2.6% organically, excluding the impact of foreign currency translation and the divestiture of a small Safety Assessment site in 2024).

The company reported full-year 2025 revenues of $4.02 billion, which decreased 0.9% from the prior-year level. The figure surpassed the Zacks Consensus Estimate by 0.2%. 

Following the announcement, CRL shares fell 0.8% in the pre-market trading today.

CRL’s Q4 Segmental Performance in Detail

The company reports under three segments — Research Models and Services (“RMS”), Discovery and Safety Assessment (“DSA”) and Manufacturing Solutions.

RMS’ revenues totaled $206.3 million, up 1% year over year (down 0.9% organically). The organic decrease was mainly due to lower revenues for large research models and small research models in North America. Our model estimated RMS’ revenues to be $205.2 million in the fourth quarter.

Charles River Laboratories International, Inc. Price, Consensus and EPS Surprise

Charles River Laboratories International, Inc. price-consensus-eps-surprise-chart | Charles River Laboratories International, Inc. Quote

DSA’s revenues amounted to $591.6 million, down 2% year over year and 3.3% organically. The organic decline in revenues was primarily due to lower sales volume for discovery services and also regulated safety assessment services. Our model projected revenues of $579.8 million for this segment.

Manufacturing Solutions’ revenues totaled $196.4 million, up 0.7% year over year (down 2.1% organically).

The organic decrease was mainly due to lower revenues in the CDMO business. Our model projected revenues to be $199.5 million for the fourth quarter.

CRL’s Margin Performance

The gross profit in the reported quarter was $414.4 million, up 8.8% from the prior-year quarter’s level. The gross margin of 41.7% rose 368 basis points (bps) year over year.

Selling, general & administrative expenses increased 0.2% year over year to $196.1 million. The adjusted operating profit totaled $218.3 million, reflecting a 17.8% jump from the prior-year quarter’s level. The adjusted operating margin expanded 347 bps to 22%.

CRL’s Liquidity Position

Charles River exited the fourth quarter of 2025 with cash and cash equivalents of $213.8 million compared with $194.6 million at the end of 2024.

Cumulative net cash provided by operating activities at the end of the fourth quarter was $737.6 million compared with $734.6 million a year ago.

Charles River’s 2026 Guidance

The company issued a full-year 2026 outlook, expecting total revenues to be at least flat to 1.5% growth. The Zacks Consensus Estimate for 2025 revenues is pegged at $4.07 billion, implying 1.6% growth.

Adjusted EPS for 2026 is expected in the range of $10.70-$11.20. The Zacks Consensus Estimate for the metric is pegged at $10.59.

Our Take on CRL

Charles River exited the fourth quarter of 2025 with earnings and revenues beating estimates. The company saw substantial improvement in DSA net bookings in the quarter, reflecting the stabilization of the biopharmaceutical demand environment. The expansion of both margins is highly encouraging. Charles River is significantly advancing several strategic initiatives that will enable it to better capitalize on future growth opportunities while also focusing on scientific innovation. Management is cautiously optimistic that positive demand trends will continue in 2026.

Organic growth in all three segments was down on a year-over-year basis.

CRL’s Zacks Rank and Key Picks

Charles River currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks from the broader medical space are Intuitive Surgical ISRG, Cardinal Health CAH and Align Technology ALGN.

Intuitive Surgical, currently sporting a Zacks Rank #1 (Strong Buy), reported a fourth-quarter 2025 adjusted EPS of $2.53, which surpassed the Zacks Consensus Estimate by 12.4%. Revenues of $2.87 billion beat the Zacks Consensus Estimate by 4.7%. You can see the complete list of today’s Zacks #1 Rank stocks here.

ISRG has an estimated long-term earnings growth rate of 15.7% compared with the industry’s 12.7% growth. The company beat earnings estimates in each of the trailing four quarters, the average surprise being 13.24%.

Cardinal Health, carrying a Zacks Rank #2 (Buy) at present, posted a second-quarter fiscal 2026 adjusted EPS of $2.63, exceeding the Zacks Consensus Estimate by 10%. Revenues of $65.6 billion topped the Zacks Consensus Estimate by 0.9%.

CAH has a long-term earnings growth rate of 15% compared with the industry’s 9.6% growth. The company’s earnings outpaced estimates in each of the trailing four quarters, the average surprise being 9.3%.

Align Technology, carrying a Zacks Rank #2 at present, posted a fourth-quarter 2025 adjusted EPS of $3.29, exceeding the Zacks Consensus Estimate by 10.1%. Revenues of $1.05 billion outperformed the Zacks Consensus Estimate by 5.3%.

ALGN has an estimated long-term earnings growth rate of 10.1% compared with the industry’s 9.5% growth. The company’s earnings outpaced estimates in three of the trailing four quarters and missed on one occasion, the average surprise being 6.16%.

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This article originally published on Zacks Investment Research (zacks.com).

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