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Charles River Laboratories International, Inc. CRL is scheduled to report first-quarter 2025 results on May 7, before market open.
In the last reported quarter, the company’s adjusted earnings per share (EPS) of $2.66 surpassed the Zacks Consensus Estimate by 6.4%. Earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 10.22%. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)
The Zacks Consensus Estimate for revenues is pegged at $935.1 million, suggesting a 7.6% decline from the year-ago reported figure.
The Zacks Consensus Estimate for EPS of $2.06 indicates a 9.3% year-over-year fall.
Estimates for Charles River’s first-quarter earnings have moved south 6.8% to $2.06 per share in the past 60 days.
Let's take a look at how things might have shaped up for the MedTech major prior to the announcement.
The segment likely delivered solid sales of small research models in all geographic regions, mainly driven by higher pricing. Contributions from Noveprim, in which Charles River now has a controlling stake, may have favorably boosted the revenues. However, the ongoing challenges in the biopharmaceutical demand environment likely weighed on the 2025 first-quarter performance, resulting in lower revenues for Charles River’s Research Model Services, including the Charles River Accelerator and Development Lab (CRADL) operations.
In China, lower non-human primate sales and a challenging life science environment are also expected to have been headwinds to growth. Additionally, the company’s Cell Solutions may have been impacted by the consolidation of its operations to its largest California site, leading to lower revenues in the first quarter. In light of the developments around NIH funding, Charles River aims to closely monitor its academic and government client base, even though it generates less than 2% of total revenues tied directly to NIH.
Charles River Laboratories International, Inc. price-eps-surprise | Charles River Laboratories International, Inc. Quote
In January 2025, the company unveiled Apollo for CRADL, a secure cloud-based platform to enhance access to services and visibility across teams and processes. The Apollo technology stack powers Charles River’s digital transformation and has been integrated across its extensive portfolio.
Our model estimates Charles River’s RMS business revenues to be $203 million for the quarter, suggesting an 8.1% decrease year over year.
In the fourth quarter of 2024, the segment reported a decline in revenues reflecting lower study volume and slightly lower pricing. Safety Assessment pricing turned negative in the to-be-reported quarter as the moderating pricing environment during the year started to work from backlog into the revenue stream. These trends are likely to have carried into the first quarter as well, affecting the revenues.
On a promising note, Charles River is expected to have benefited from several of its recent advancements, including the new Retrogenix Non-Human Protein Library and its partnership with H. Lundbeck A/S (Lundbeck) to utilize Logica, an AI-powered drug Discovery platform developed with Valo Health, to advance critical brain disease research.
In January, Charles River extended its strategic partnership with Deciphex to focus on advancing cutting-edge image management solutions. In March, the company announced the identification of the first lead product candidate using Logica for treating various forms of lupus and other autoimmune indications with significant unmet need. All these developments may have positively impacted the DSA segment revenues in the first quarter.
Per our model estimate, Charles River’s DSA business revenues should be $545.8 million in the first quarter, suggesting a 9.9% decline year over year.
Within this segment, the Microbial Solutions business is expected to have reported a solid performance across the Endosafe, Celsis and Accugenix testing platforms. Endosafe likely had another strong quarter for testing consumables and instrument placements. The Biologics Testing business may have benefited from strong demand for its core testing activities, including cell banking, viral clearance and viral safety testing. However, Charles River likely posted lower revenues in its Contract Development and Manufacturing Organization services business, owing to the loss of two commercial clients.
Some notable developments in the quarter include the integration of Akron Bio’s Closed System Solutions line of liquid cytokines produced onto Charles River’s Cell Therapy Flex Platform for Process Development and a collaboration with Singapore General Hospital to support the development of novel cancer therapeutics.
Our model estimates Charles River’s Manufacturing business revenues to be $186.1 million, suggesting modest 0.5% growth year over year.
Per our proven model, stocks with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold), along with a positive Earnings ESP, have a higher chance of beating estimates, which is not the case here:
CRL’s Earnings ESP: Charles River has an Earnings ESP of -0.52%. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
CRL’s Zacks Rank: Charles River currently carries a Zacks Rank #3.
Here are some medical stocks worth considering, as these have the right combination of elements to post an earnings beat this time:
ANI Pharmaceuticals ANIP has an Earnings ESP of +0.86% and sports a Zacks Rank #1 at present. The company is slated to release first-quarter 2025 results on May 9. You can see the complete list of today’s Zacks #1 Rank stocks here.
ANIP’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 17.32%. The Zacks Consensus Estimate for the company’s first-quarter EPS is expected to increase 30.6% from the year-ago quarter figure.
Cencora COR currently has an Earnings ESP of +0.91% and a Zacks Rank #2. The company is slated to release second-quarter fiscal 2025 results on May 7.
The company’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 4.94%. The Zacks Consensus Estimate for COR’s fiscal second-quarter EPS is expected to rise 7.1% from the year-ago reported figure.
Hims & Hers Health HIMS presently has an Earnings ESP of +115.69% and a Zacks Rank #2. The company is slated to release first-quarter 2025 results on May 5.
HIMS’ earnings surpassed estimates in three of the trailing four quarters and missed on one occasion, the average surprise being 40.42%. The Zacks Consensus Estimate for Hims & Hers Health’s first-quarter EPS is expected to increase by 180% from the year-ago quarter figure.
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This article originally published on Zacks Investment Research (zacks.com).
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