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Charles River (CRAI) Q3 Earnings Beat, '21 Revenue View Down

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CRA International, Inc., that conducts business as Charles River Associates (CRAI - Free Report) , reported mixed third-quarter 2021 results, with earnings beating the Zacks Consensus Estimate but revenues missing the same.

The earnings beat, however, failed to impress the market, with the stock declining 2% since Nov 4, the date of release. This can be attributed to the company’s guidance for 2021 being weak. Charles River lowered its revenue guidance and currently expects revenues in the range of $560 million to $570 million compared with the previous guidance of $565 million to $575 million. The midpoint ($565 million) of the lowered guided range is below the current Zacks Consensus Estimate of $568.75 million. The company continues to anticipate Non-GAAP EBITDA margin in the band of 11.2% to 11.7%.

Quarterly non-GAAP EPS came in at $1.44, which beat the Zacks Consensus Estimate by 34.6% and increased 89.5% year over year. Revenues of $136.4 million lagged the consensus mark by 1.2% but increased 12% year over year, driven by improved utilization and headcount increase, marking the 23rd consecutive quarter of year-over-year growth.

The company recorded double-digit revenue growth in Financial Economics, Forensic Services, Antitrust & Competition Economics, Labor & Employment, Marakon, and Risk, Investigations & Analytics practices. It achieved a respective 14.1% and 3.5% revenue growth across North American and international operations.

Charles River’s shares have gained a huge 108.6% over the past year, significantly outperforming the 56.4% growth of the industry it belongs to.

Charles River Associates Price, Consensus and EPS Surprise Charles River Associates Price, Consensus and EPS Surprise

Charles River Associates price-consensus-eps-surprise-chart | Charles River Associates Quote

Other Quarterly Details

The company delivered 73% utilization while headcount was up by 6.8% year over year. Non-GAAP EBITDA increased 35.3% year over year to $16.2 million. Non-GAAP EBITDA margin expanded 210 basis points year over year to 11.9%.

The company exited the quarter with cash and cash equivalents of $19.7 million compared with $14 million witnessed at the end of the prior quarter. It generated $50.1 million of cash from operating activities and capex was $0.6 million. In the quarter, Charles River paid out $1.9 million in dividends and repurchased shares worth $5 million.

Currently, Charles River carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Some Other Business Services Companies

Equifax (EFX - Free Report) reported better-than-expected third-quarter 2021 results. Adjusted earnings of $1.85 per share beat the Zacks Consensus Estimate by 7.6% but declined 1.1% on a year-over-year basis. Revenues of $1.22 billion outpaced the consensus estimate by 3.6% and improved 14.5% year over year.

IQVIA Holdings (IQV - Free Report) reported impressive third-quarter 2021 results, with earnings per share of $2.17 beating the consensus mark by 1.9% and improving 33.1% on a year-over-year basis. Total revenues of $3.39 billion outpaced the consensus estimate by 1% and increased 21.7% year over year.

Omnicom (OMC - Free Report) reported third-quarter 2021 adjusted earnings of $1.65 per share that beat the consensus mark by 20.4% and increased 36.4% year over year. Total revenues of $3.4 billion surpassed the consensus estimate by 0.6% and increased 7.1% year over year.

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