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WILMINGTON, Mass. - On Wednesday, Charles River Laboratories International, Inc. (NYSE:CRL) reported third-quarter results that exceeded analyst expectations, as the company showed signs of stabilization amid ongoing challenges in the healthcare sector.
The early-stage drug development services provider posted adjusted earnings of $2.43 per share for the third quarter, surpassing the analyst consensus of $2.34. Revenue came in at $1 billion, slightly above the analyst estimate of $987.43 million, though this represented a 0.5% decrease from $1.01 billion in the same period last year. The stock remained unchanged following the announcement.
On an organic basis, revenue declined 1.6% when excluding the impact of foreign currency translation, which boosted reported revenue by 1.3%, and the divestiture of a small Safety Assessment site, which reduced revenue by 0.2%.
"Our solid third-quarter financial results demonstrate that the demand for our extensive portfolio of early-stage research and manufacturing products and services remains stable," said James C. Foster, Chair, President and Chief Executive Officer. "We believe that positive signals are beginning to emerge which indicate that the industry may be on a path towards recovery; however, sustained improvement in our business will take time."
The company’s Research Models and Services segment was the bright spot, with revenue increasing 7.9% to $213.5 million, driven primarily by higher revenue from large research model products. However, the Discovery and Safety Assessment segment saw revenue decline 2.3% to $600.7 million, while Manufacturing Solutions revenue fell 3.1% to $190.7 million.
Charles River narrowed its full-year 2025 guidance, now expecting adjusted earnings of $10.10 to $10.30 per share, compared to its previous range of $9.90 to $10.30. The company also refined its organic revenue growth forecast to a decline of 1.5% to 2.5%, versus the previous projection of a 1.0% to 3.0% decrease.
"In this environment, we believe it is critical to remain intently focused on our strategy to further differentiate ourselves from the competition through our science and our innovative solutions," Foster added.
The company’s GAAP operating margin increased to 13.3% from 11.6% in the third quarter of 2024, while non-GAAP operating margin slightly decreased to 19.7% from 19.9%.
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