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Charles River (CRL) Q4 Earnings Beat Estimates, Margins Up
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Charles River Laboratories International, Inc. (CRL - Free Report) announced adjusted earnings per share (EPS) of $2.49 for fourth-quarter 2021, reflecting a 4.2% improvement from the year-ago earnings. The metric surpassed the Zacks Consensus Estimate by 2.9%.
On a GAAP basis, earnings declined 4.9% year over year to $2.67.
Full-year adjusted EPS was $10.32, a 26.9% jump from the year-ago period and 0.7% ahead of the Zacks Consensus Estimate. The full-year adjusted figure also exceeded the company’s guidance range of $10.20-$10.30.
Revenues
Revenues in the fourth quarter totaled $905.1 million, beating the Zacks Consensus Estimate by 1.5%. Moreover, the top line improved 14.4% from the year-ago number (up 10.5% organically, excluding the impact of acquisition and foreign currency translation).
The comparison to the COVID-related impact in 2020 increased both the reported and organic revenue growth rates by 0.5% in fourth-quarter 2021.
For 2021, the company reported revenues of $3.54 billion, up 21.1% from 2020 (up 15.1% organically). The full-year figure edged past the Zacks Consensus Estimate of $3.53 billion and also exceeded the company’s reported and organic revenue growth guidance range of 19.5-20.5% and 13.5-14.5%, respectively.
Segment in Detail
Charles River’s fourth-quarter total Research Models and Services (RMS) revenues of $165.6 million reflected an increase of 5.7% year over year (up 13.3% organically). Organic revenue growth was driven by the robust demand for research models, particularly in China, as well as higher revenues from research model services. However, the Q4 results for the cell supply business, which consists of HemaCare and Cellero, continued to be impacted by donor access and availability.
Charles River Laboratories International, Inc. Price, Consensus and EPS Surprise
Discovery and Safety Assessment (DSA) revenues of $534.1 million rose 7.9% (up 6.7% organically). Organic revenue growth was mainly driven by strong contributions from Discovery Services and Safety Assessment businesses.
Manufacturing Solutions revenues totaled $205.3 million, up 47.4% year over year (up 21.2% organically). Organic revenue growth was fueled by strong demand for the Biologics Testing Solutions, Microbial Solutions, and Avian Vaccine businesses.
Margins
The gross profit in the reported quarter was $347.1 million, up 15.7% from the prior-year quarter. The gross margin of 38.4% expanded 43 basis points (bps).
Meanwhile, selling, general & administrative expenses edged up 0.8% to $144.1 million.
Adjusted operating income totaled $203 million, reflecting a 29.3% jump from the prior-year quarter. The adjusted operating margin in the fourth quarter expanded 259 bps to 22.4%.
Liquidity and Cash Position
Charles River exited 2021 with cash and cash equivalents of $241.2 million compared with $228.4 million at the end of 2020.
Cumulative net cash provided by operating activities at the end of the fourth quarter was $760.8 million compared with the prior-year quarter’s $546.6 million.
2022 Guidance Reaffirmed
The company reinstated its 2022 guidance (initiated in January 2022).
For 2022, revenues are expected to grow in the band of 13-15% on a reported basis. Organic revenue growth is expected in the range of 12.5-14.5%. The Zacks Consensus Estimate for total revenues is pegged at $3.96 billion, indicating a 12.2% rise from 2021.
Adjusted EPS for 2022 is expected in the range of $11.50-$11.75. The current Zacks Consensus Estimate is pegged at 11.54.
Our Take
Charles River exited the fourth quarter of 2021 with better-than-expected earnings and revenues. The results highlighted 10.5% organic revenue growth, driven by strength across all three segments. Margin expansion and meaningful cash flow generation are other upsides. The 2022 financial projections with strong growth expectations too buoy investors’ optimism.
Zacks Rank and Other Key Picks
Charles River currently carries a Zacks Rank #2 (Buy).
GlaxoSmithKline, carrying a Zacks Rank #2, reported fourth-quarter 2021 adjusted earnings of 69 cents per American depositary share (“ADS”), which beat the Zacks Consensus Estimate by 9.5%. Revenues of $13 billion outpaced the consensus mark by 3%.
GlaxoSmithKline has an estimated long-term growth rate of 5.6%. GSK surpassed estimates in three of the trailing four quarters, the average surprise being 20.5%.
Molina Healthcare reported fourth-quarter 2021 adjusted EPS of $2.88, which surpassed the Zacks Consensus Estimate by 2.1%. Fourth-quarter revenues of $7.41 billion outpaced the Zacks Consensus Estimate by 3.9%. It currently carries a Zacks Rank #2.
Molina Healthcare has an estimated long-term growth rate of 18.8%. MOH surpassed estimates in three of the trailing four quarters, the average surprise being 5%.
Bio-Rad reported fourth-quarter 2021 adjusted EPS of $3.21, which surpassed the Zacks Consensus Estimate by 11.9%. Fourth-quarter revenues of $732.8 million outpaced the Zacks Consensus Estimate by 0.5%. It currently has a Zacks Rank #2.
Bio-Rad has an earnings yield of 2.3%, which compares favorably with the industry’s negative yield. BIO surpassed estimates in the trailing four quarters, the average surprise being 66.9%.
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Charles River (CRL) Q4 Earnings Beat Estimates, Margins Up
Charles River Laboratories International, Inc. (CRL - Free Report) announced adjusted earnings per share (EPS) of $2.49 for fourth-quarter 2021, reflecting a 4.2% improvement from the year-ago earnings. The metric surpassed the Zacks Consensus Estimate by 2.9%.
On a GAAP basis, earnings declined 4.9% year over year to $2.67.
Full-year adjusted EPS was $10.32, a 26.9% jump from the year-ago period and 0.7% ahead of the Zacks Consensus Estimate. The full-year adjusted figure also exceeded the company’s guidance range of $10.20-$10.30.
Revenues
Revenues in the fourth quarter totaled $905.1 million, beating the Zacks Consensus Estimate by 1.5%. Moreover, the top line improved 14.4% from the year-ago number (up 10.5% organically, excluding the impact of acquisition and foreign currency translation).
The comparison to the COVID-related impact in 2020 increased both the reported and organic revenue growth rates by 0.5% in fourth-quarter 2021.
For 2021, the company reported revenues of $3.54 billion, up 21.1% from 2020 (up 15.1% organically). The full-year figure edged past the Zacks Consensus Estimate of $3.53 billion and also exceeded the company’s reported and organic revenue growth guidance range of 19.5-20.5% and 13.5-14.5%, respectively.
Segment in Detail
Charles River’s fourth-quarter total Research Models and Services (RMS) revenues of $165.6 million reflected an increase of 5.7% year over year (up 13.3% organically). Organic revenue growth was driven by the robust demand for research models, particularly in China, as well as higher revenues from research model services. However, the Q4 results for the cell supply business, which consists of HemaCare and Cellero, continued to be impacted by donor access and availability.
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
Discovery and Safety Assessment (DSA) revenues of $534.1 million rose 7.9% (up 6.7% organically). Organic revenue growth was mainly driven by strong contributions from Discovery Services and Safety Assessment businesses.
Manufacturing Solutions revenues totaled $205.3 million, up 47.4% year over year (up 21.2% organically). Organic revenue growth was fueled by strong demand for the Biologics Testing Solutions, Microbial Solutions, and Avian Vaccine businesses.
Margins
The gross profit in the reported quarter was $347.1 million, up 15.7% from the prior-year quarter. The gross margin of 38.4% expanded 43 basis points (bps).
Meanwhile, selling, general & administrative expenses edged up 0.8% to $144.1 million.
Adjusted operating income totaled $203 million, reflecting a 29.3% jump from the prior-year quarter. The adjusted operating margin in the fourth quarter expanded 259 bps to 22.4%.
Liquidity and Cash Position
Charles River exited 2021 with cash and cash equivalents of $241.2 million compared with $228.4 million at the end of 2020.
Cumulative net cash provided by operating activities at the end of the fourth quarter was $760.8 million compared with the prior-year quarter’s $546.6 million.
2022 Guidance Reaffirmed
The company reinstated its 2022 guidance (initiated in January 2022).
For 2022, revenues are expected to grow in the band of 13-15% on a reported basis. Organic revenue growth is expected in the range of 12.5-14.5%. The Zacks Consensus Estimate for total revenues is pegged at $3.96 billion, indicating a 12.2% rise from 2021.
Adjusted EPS for 2022 is expected in the range of $11.50-$11.75. The current Zacks Consensus Estimate is pegged at 11.54.
Our Take
Charles River exited the fourth quarter of 2021 with better-than-expected earnings and revenues. The results highlighted 10.5% organic revenue growth, driven by strength across all three segments. Margin expansion and meaningful cash flow generation are other upsides. The 2022 financial projections with strong growth expectations too buoy investors’ optimism.
Zacks Rank and Other Key Picks
Charles River currently carries a Zacks Rank #2 (Buy).
Some other top-ranked stocks in the broader medical space that have announced quarterly results are GlaxoSmithKline plc (GSK - Free Report) , Molina Healthcare, Inc. (MOH - Free Report) and Bio-Rad Laboratories, Inc. (BIO - Free Report) . You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
GlaxoSmithKline, carrying a Zacks Rank #2, reported fourth-quarter 2021 adjusted earnings of 69 cents per American depositary share (“ADS”), which beat the Zacks Consensus Estimate by 9.5%. Revenues of $13 billion outpaced the consensus mark by 3%.
GlaxoSmithKline has an estimated long-term growth rate of 5.6%. GSK surpassed estimates in three of the trailing four quarters, the average surprise being 20.5%.
Molina Healthcare reported fourth-quarter 2021 adjusted EPS of $2.88, which surpassed the Zacks Consensus Estimate by 2.1%. Fourth-quarter revenues of $7.41 billion outpaced the Zacks Consensus Estimate by 3.9%. It currently carries a Zacks Rank #2.
Molina Healthcare has an estimated long-term growth rate of 18.8%. MOH surpassed estimates in three of the trailing four quarters, the average surprise being 5%.
Bio-Rad reported fourth-quarter 2021 adjusted EPS of $3.21, which surpassed the Zacks Consensus Estimate by 11.9%. Fourth-quarter revenues of $732.8 million outpaced the Zacks Consensus Estimate by 0.5%. It currently has a Zacks Rank #2.
Bio-Rad has an earnings yield of 2.3%, which compares favorably with the industry’s negative yield. BIO surpassed estimates in the trailing four quarters, the average surprise being 66.9%.