Understanding Charles River (CRL) Reliance on International Revenue

Have you evaluated the performance of Charles River Laboratories' (CRL) international operations during the quarter that concluded in March 2025? Considering the extensive worldwide presence of this medical research equipment and services provider, analyzing the patterns in international revenues is crucial for understanding its financial resilience and potential for growth.

In the current global economy, which is more interconnected than ever, a company's success in penetrating international markets is crucial for its financial health and growth journey. Investors must understand a company's dependence on overseas markets, as this offers a window into the company's earnings stability, its ability to benefit from varied economic cycles and its potential for long-term growth.

Being present in international markets serves as a counterbalance to domestic economic challenges while offering chances to engage with more rapidly evolving economies. However, this kind of diversification introduces challenges like currency fluctuations, geopolitical uncertainties and varying market trends.

In our recent assessment of CRL's quarterly performance, we discovered notable trends in its overseas revenue sections, which are typically modeled and scrutinized by Wall Street analysts.

The company's total revenue for the quarter stood at $984.17 million, declining 2.7% year over year. Now, let's delve into CRL's international revenue breakdown to gain insights into the significance of its operations beyond home turf.

Decoding CRL's International Revenue Trends

Canada accounted for 12.74% of the company's total revenue during the quarter, translating to $125.35 million. Revenues from this region represented a surprise of +29.81%, with Wall Street analysts collectively expecting $96.57 million. When compared to the preceding quarter and the same quarter in the previous year, Canada contributed $119.36 million (11.91%) and $110.4 million (10.91%) to the total revenue, respectively.

Other International, including Brazil and Israel generated $16.67 million in revenues for the company in the last quarter, constituting 1.69% of the total. This represented a surprise of +147.67% compared to the $6.73 million projected by Wall Street analysts. Comparatively, in the previous quarter, Other International, including Brazil and Israel accounted for $17.12 million (1.71%), and in the year-ago quarter, it contributed $16.75 million (1.66%) to the total revenue.

Of the total revenue, $41.94 million came from Asia Pacific during the last fiscal quarter, accounting for 4.26%. This represented a surprise of -4.13% as analysts had expected the region to contribute $43.75 million to the total revenue. In comparison, the region contributed $55.78 million, or 5.56%, and $45.77 million, or 4.52%, to total revenue in the previous and year-ago quarters, respectively.

During the quarter, Europe contributed $263.25 million in revenue, making up 26.75% of the total revenue. When compared to the consensus estimate of $251.8 million, this meant a surprise of +4.55%. Looking back, Europe contributed $263.33 million, or 26.27%, in the previous quarter, and $276.32 million, or 27.32%, in the same quarter of the previous year.

Revenue Forecasts for the International Markets

Wall Street analysts expect Charles River to report $973.37 million in total revenue for the current fiscal quarter, indicating a decline of 5.1% from the year-ago quarter. Canada, Other International, including Brazil and Israel, Asia Pacific and Europe are expected to contribute 10.7% ($104.55 million), 0.4% ($4.06 million), 5% ($48.6 million) and 25.9% ($251.7 million) to the total revenue, respectively.

For the full year, the company is expected to generate $3.89 billion in total revenue, down 4.1% from the previous year. Revenues from Canada, Other International, including Brazil and Israel, Asia Pacific and Europe are expected to constitute 11% ($428.73 million), 0.6% ($25.05 million), 4.8% ($185.42 million) and 25.7% ($1 billion) of the total, respectively.

Final Thoughts

The dependency of Charles River on global markets for its revenues presents a mix of potential gains and hazards. Thus, monitoring the trends in its overseas revenues can be a key indicator for predicting the firm's future performance.

In a world where international interdependencies and geopolitical conflicts are ever-increasing, Wall Street analysts closely monitor these trends for companies having international presence to adjust their earnings forecasts. Of course, there are several other factors, including a company's standing within its home borders, that influence analysts' earnings forecasts.

At Zacks, we place significant importance on a company's evolving earnings outlook. This is based on empirical evidence demonstrating its strong influence on a stock's short -term price movements. Invariably, there exists a positive relationship -- an upward revision in earnings estimates is typically mirrored by a rise in the stock price.

The Zacks Rank, our proprietary stock rating tool, comes with an externally validated impressive track record. It effectively utilizes shifts in earnings projections to act as a dependable barometer for forecasting short-term stock price trends.

Charles River, bearing a Zacks Rank #3 (Hold), is expected to mirror the broader market's movements in the near term. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Examining the Latest Trends in Charles River's Stock Value

The stock has increased by 34.2% over the past month compared to the 9.1% rise of the Zacks S&P 500 composite. Meanwhile, the Zacks Medical sector, which includes Charles River, has increased 1.4% during this time frame. Over the past three months, the company's shares have experienced a loss of 5.9% relative to the S&P 500's 3.1% decline. Throughout this period, the sector overall has witnessed an 8.7% decrease.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

 
Charles River Laboratories International, Inc. (CRL): Free Stock Analysis Report

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

Zacks Investment Research