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Charles River (CRL) to Report Q3 Earnings: What's in Store?
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Charles River Laboratories International, Inc. (CRL - Free Report) is scheduled to report third-quarter 2022 results on Nov 2, before market open.
In the last reported quarter, the company’s adjusted earnings per share of $2.77 surpassed the Zacks Consensus Estimate by 1.09%. Earnings surpassed estimates in each of the trailing four quarters, the average beat being 2.63%.
Let’s take a look at how things have shaped up prior to this announcement.
Factors at Play
The Research Models and Services (RMS) segment is likely to have gained from continued global demand for research models and associated services. The company’s ongoing initiatives to boost operating performances by HemaCare and Cellero are anticipated to have had a beneficial impact on the cell supply business.
The ongoing broad-based demand and meaningful price increases in the Research Model business, particularly in North America,as well as for Global Research Models Services, particularly Insourcing Solutions and GEMSdriven by increased research activities in this geography are expected to have contributed to the top line in Q3. However, an adverse impact related to China's COVID restrictions through the months of Q3 are likely to have disrupted RMS revenues.
Charles River Laboratories International, Inc. Price and EPS Surprise
Meanwhile, the company’s CRADLE initiative for small and large biopharmaceutical clients is anticipated to have maintained its growth momentum, benefiting the in-sourcing solutions business within the RMS arm.
The Discovery and Safety Assessment (DSA) arm is likely to have benefited from a strong biotechnology client base and robust backlog at the end of 2021.
Within the DSA arm, the Safety Assessment business has been witnessing strong demand and price increases. The company expects growth in this business banking on strong business trends with higher pricing and increased demand within the Safety Assessment business.
Further, amid the staffing shortage issue, Charles River expects recent hires to help the company meet the accelerating DSA growth outlook over the course of 2022. This should get reflected in the Q3 results itself.
The Discovery business is likely to have gained from continued strong performances by early discovery and CNS services. Of late, Charles River has been witnessing growing client interest in integrated drug discovery programs. To meet the robust client demand for Discovery Services, the company has been closely managing staffing levels and introducing cutting-edge capabilities. The company has also been consistently expanding its discovery portfolio through strategic partnerships and acquisitions. We expect these ongoing business trends and initiatives to have fueled growth during the second quarter.
The Manufacturing Support segment is likely to have been driven by revenue growth across the Microbial Solutions and Biologics Testing Solutions businesses. The company has been recording strong demand across its portfolio of critical quality control testing solutions within the Microbial Solutions business. Meanwhile, we anticipate the continued uptake of cell and gene therapy testing services for the Biologics Testing Solutions business to have driven revenues in the to-be-reported quarter.
Q3 Estimates
The Zacks Consensus Estimate for the company’s third-quarter 2022 revenues is pegged at $978.7 million, suggesting a 9.2% rise over the year-ago reported figure.
The Zacks Consensus Estimate for the company’s third-quarter 2022 earnings per share of $2.51 indicates a 7.0% drop from the year-ago reported figure.
What Our Model Suggests
Per our proven model, a stock with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) along with a positive Earnings ESP has higher chances of beating estimates. However, this is not the case here, as you can see:
Earnings ESP: The company has an Earnings ESP of -0.87%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: The company currently carries a Zacks Rank #3.
Stocks Worth a Look
Here are a few stocks worth considering as these have the right combination of elements to beat on earnings this reporting cycle.
Chimerix’s earnings yield of 112.3% compares favorably with the industry’s -2.98%.
McKesson (MCK - Free Report) has an Earnings ESP of +0.27% and a Zacks Rank of #2. McKesson is scheduled to release third-quarter 2022 results on Nov 1.
McKesson’s long-term historical earnings growth rate is estimated at 14.2%. MCK’s earnings yield of 6.77% compares favorably with the industry’s 5.19%.
Humana (HUM - Free Report) currently has an Earnings ESP of +1.12% and a Zacks Rank of #2. Humana is slated to release third-quarter 2022 results on Nov 2.
Humana’s long-term historical earnings growth rate is estimated at 16.2%. HUM’s earnings yield of 5%, in line with the industry.
Image: Bigstock
Charles River (CRL) to Report Q3 Earnings: What's in Store?
Charles River Laboratories International, Inc. (CRL - Free Report) is scheduled to report third-quarter 2022 results on Nov 2, before market open.
In the last reported quarter, the company’s adjusted earnings per share of $2.77 surpassed the Zacks Consensus Estimate by 1.09%. Earnings surpassed estimates in each of the trailing four quarters, the average beat being 2.63%.
Let’s take a look at how things have shaped up prior to this announcement.
Factors at Play
The Research Models and Services (RMS) segment is likely to have gained from continued global demand for research models and associated services. The company’s ongoing initiatives to boost operating performances by HemaCare and Cellero are anticipated to have had a beneficial impact on the cell supply business.
The ongoing broad-based demand and meaningful price increases in the Research Model business, particularly in North America,as well as for Global Research Models Services, particularly Insourcing Solutions and GEMSdriven by increased research activities in this geography are expected to have contributed to the top line in Q3. However, an adverse impact related to China's COVID restrictions through the months of Q3 are likely to have disrupted RMS revenues.
Charles River Laboratories International, Inc. Price and EPS Surprise
Charles River Laboratories International, Inc. price-eps-surprise | Charles River Laboratories International, Inc. Quote
Meanwhile, the company’s CRADLE initiative for small and large biopharmaceutical clients is anticipated to have maintained its growth momentum, benefiting the in-sourcing solutions business within the RMS arm.
The Discovery and Safety Assessment (DSA) arm is likely to have benefited from a strong biotechnology client base and robust backlog at the end of 2021.
Within the DSA arm, the Safety Assessment business has been witnessing strong demand and price increases. The company expects growth in this business banking on strong business trends with higher pricing and increased demand within the Safety Assessment business.
Further, amid the staffing shortage issue, Charles River expects recent hires to help the company meet the accelerating DSA growth outlook over the course of 2022. This should get reflected in the Q3 results itself.
The Discovery business is likely to have gained from continued strong performances by early discovery and CNS services. Of late, Charles River has been witnessing growing client interest in integrated drug discovery programs. To meet the robust client demand for Discovery Services, the company has been closely managing staffing levels and introducing cutting-edge capabilities. The company has also been consistently expanding its discovery portfolio through strategic partnerships and acquisitions. We expect these ongoing business trends and initiatives to have fueled growth during the second quarter.
The Manufacturing Support segment is likely to have been driven by revenue growth across the Microbial Solutions and Biologics Testing Solutions businesses. The company has been recording strong demand across its portfolio of critical quality control testing solutions within the Microbial Solutions business. Meanwhile, we anticipate the continued uptake of cell and gene therapy testing services for the Biologics Testing Solutions business to have driven revenues in the to-be-reported quarter.
Q3 Estimates
The Zacks Consensus Estimate for the company’s third-quarter 2022 revenues is pegged at $978.7 million, suggesting a 9.2% rise over the year-ago reported figure.
The Zacks Consensus Estimate for the company’s third-quarter 2022 earnings per share of $2.51 indicates a 7.0% drop from the year-ago reported figure.
What Our Model Suggests
Per our proven model, a stock with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) along with a positive Earnings ESP has higher chances of beating estimates. However, this is not the case here, as you can see:
Earnings ESP: The company has an Earnings ESP of -0.87%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: The company currently carries a Zacks Rank #3.
Stocks Worth a Look
Here are a few stocks worth considering as these have the right combination of elements to beat on earnings this reporting cycle.
Chimerix (CMRX - Free Report) has an Earnings ESP of +33.81% and a Zacks Rank of #2. The company will release third-quarter 2022 results on Nov 3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Chimerix’s earnings yield of 112.3% compares favorably with the industry’s -2.98%.
McKesson (MCK - Free Report) has an Earnings ESP of +0.27% and a Zacks Rank of #2. McKesson is scheduled to release third-quarter 2022 results on Nov 1.
McKesson’s long-term historical earnings growth rate is estimated at 14.2%. MCK’s earnings yield of 6.77% compares favorably with the industry’s 5.19%.
Humana (HUM - Free Report) currently has an Earnings ESP of +1.12% and a Zacks Rank of #2. Humana is slated to release third-quarter 2022 results on Nov 2.
Humana’s long-term historical earnings growth rate is estimated at 16.2%. HUM’s earnings yield of 5%, in line with the industry.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.