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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 2023 results on Nov 8.
In the last reported quarter, the company’s adjusted earnings per share of $2.69 surpassed the Zacks Consensus Estimate by 2.28%. Earnings surpassed estimates in each of the trailing four quarters, the average beat being 5.69%.
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. Similar to the last reported quarter, the segment is likely to have benefited from broad-based demand for small research models across global biopharma, biotech and academic and government institutions in all geographic regions. In North America and Europe, revenue growth of small research models is expected to have been driven by healthy volume increases and continued pricing gains, which are like to have added to the top line.
The company’s CRADLE or Charles River Accelerator and Development Labs initiative and research models in North America and China, including last year’s Explora acquisition, are anticipated to have maintained its growth momentum in the third quarter, driving the in-sourcing solutions business within the RMS arm.
Per our model, Charles River’s RMS business revenues are projected to be $191.6 million for the third quarter, suggesting a 6.4% increase year over year.
Charles River Laboratories International, Inc. Price and EPS Surprise
The Discovery and Safety Assessment (DSA) arm is likely to have benefited from growth in the Safety Assessment business through meaningful price increases and higher study volume. The broad-based and sustained client demand across its Safety Assessment business is expected to have benefited the company’s performance in the to-be-reported quarter.
However, current market conditions resulting in a continuation of the lower backlog and booking trends might have marred growth in the third quarter. Further, the company earlier expected a modest impact from Non-Human Primates (NHP) supply constraints, principally in the third quarter. Added to this, the company also apprehended change in near-term demand trends of biopharmaceutical clients as they appeared to be reprioritizing their pipelines and tightening their R&D budgets.
Per our model, Charles River’s DSA’s business revenues are projected to be $630.8 million in the third quarter, implying 1.8% growth year over year.
The Manufacturing Support segment is likely to have been driven by revenue growth across Microbial Solutions. The Accugenix microbial identification platform has been gaining strength on instrument placements and demand for testing services within the Microbial Solutions business. Further, the cell and gene therapy CDMO business has been progressing toward its targeted growth rate goal in the past few quarters. We expect this trend to have continued through the third quarter as well, thus adding to the top line.
In May 2023, Charles River launched Accugenix Next Generation Sequencing for Bacterial Identification and Fungal Identification. The company also launched its reagent kits in July. We believe these major developments to have contributed to the company’s growth in the to-be-reported quarter.
Per our model, Charles River’s Manufacturing business revenues are projected to be $178.1 million for the third quarter, suggesting a 6.1% decline year over year.
Q3 Estimates
The Zacks Consensus Estimate for the company’s third-quarter 2023 revenues is pegged at $1.00 billion, suggesting a 1.1% rise over the year-ago reported figure.
The Zacks Consensus Estimate for the company’s third-quarter 2023 earnings per share of $2.35 indicates a 10.7% fall 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) and 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 -0.15%. 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 some medical stocks worth considering as these have the right combination of elements to post an earnings beat this quarter.
LGND’s earnings surpassed estimates in three of the trailing four quarters and missed once, with the average surprise being 52.47%. The Zacks Consensus Estimate for Ligand Pharmaceuticals’ third-quarter EPS indicates an increase of 65.9% from the year-ago reported figure.
ShockWave Medical (SWAV - Free Report) has an Earnings ESP of +6.07% and a Zacks Rank #1. The company is scheduled to release third-quarter 2023 results on Nov 6.
SWAV’s earnings surpassed estimates in three of the trailing four quarters and lagged in one, with the average surprise being 81.14%. The Zacks Consensus Estimate for ShockWave Medical’s fiscal 2023 third-quarter revenues indicates an improvement of 40.8% from the year-ago reported figure.
Inspire Medical Systems (INSP - Free Report) has an Earnings ESP of +29.81% and a Zacks Rank #3. The company is slated to release third-quarter 2023 results on Nov 7.
INSP’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 45.61%. The Zacks Consensus Estimate for Inspire Medical’s third-quarter 2023 EPS implies an increase of 11.7% from the year-ago reported figure.
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 2023 results on Nov 8.
In the last reported quarter, the company’s adjusted earnings per share of $2.69 surpassed the Zacks Consensus Estimate by 2.28%. Earnings surpassed estimates in each of the trailing four quarters, the average beat being 5.69%.
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. Similar to the last reported quarter, the segment is likely to have benefited from broad-based demand for small research models across global biopharma, biotech and academic and government institutions in all geographic regions. In North America and Europe, revenue growth of small research models is expected to have been driven by healthy volume increases and continued pricing gains, which are like to have added to the top line.
The company’s CRADLE or Charles River Accelerator and Development Labs initiative and research models in North America and China, including last year’s Explora acquisition, are anticipated to have maintained its growth momentum in the third quarter, driving the in-sourcing solutions business within the RMS arm.
Per our model, Charles River’s RMS business revenues are projected to be $191.6 million for the third quarter, suggesting a 6.4% increase year over year.
Charles River Laboratories International, Inc. Price and EPS Surprise
Charles River Laboratories International, Inc. price-eps-surprise | Charles River Laboratories International, Inc. Quote
The Discovery and Safety Assessment (DSA) arm is likely to have benefited from growth in the Safety Assessment business through meaningful price increases and higher study volume. The broad-based and sustained client demand across its Safety Assessment business is expected to have benefited the company’s performance in the to-be-reported quarter.
However, current market conditions resulting in a continuation of the lower backlog and booking trends might have marred growth in the third quarter. Further, the company earlier expected a modest impact from Non-Human Primates (NHP) supply constraints, principally in the third quarter. Added to this, the company also apprehended change in near-term demand trends of biopharmaceutical clients as they appeared to be reprioritizing their pipelines and tightening their R&D budgets.
Per our model, Charles River’s DSA’s business revenues are projected to be $630.8 million in the third quarter, implying 1.8% growth year over year.
The Manufacturing Support segment is likely to have been driven by revenue growth across Microbial Solutions. The Accugenix microbial identification platform has been gaining strength on instrument placements and demand for testing services within the Microbial Solutions business. Further, the cell and gene therapy CDMO business has been progressing toward its targeted growth rate goal in the past few quarters. We expect this trend to have continued through the third quarter as well, thus adding to the top line.
In May 2023, Charles River launched Accugenix Next Generation Sequencing for Bacterial Identification and Fungal Identification. The company also launched its reagent kits in July. We believe these major developments to have contributed to the company’s growth in the to-be-reported quarter.
Per our model, Charles River’s Manufacturing business revenues are projected to be $178.1 million for the third quarter, suggesting a 6.1% decline year over year.
Q3 Estimates
The Zacks Consensus Estimate for the company’s third-quarter 2023 revenues is pegged at $1.00 billion, suggesting a 1.1% rise over the year-ago reported figure.
The Zacks Consensus Estimate for the company’s third-quarter 2023 earnings per share of $2.35 indicates a 10.7% fall 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) and 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 -0.15%. 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 some medical stocks worth considering as these have the right combination of elements to post an earnings beat this quarter.
Ligand Pharmaceuticals (LGND - Free Report) has an Earnings ESP of +2.94% and a Zacks Rank #1. The company is expected to release third-quarter 2023 results soon. You can see the complete list of today’s Zacks #1 Rank stocks here.
LGND’s earnings surpassed estimates in three of the trailing four quarters and missed once, with the average surprise being 52.47%. The Zacks Consensus Estimate for Ligand Pharmaceuticals’ third-quarter EPS indicates an increase of 65.9% from the year-ago reported figure.
ShockWave Medical (SWAV - Free Report) has an Earnings ESP of +6.07% and a Zacks Rank #1. The company is scheduled to release third-quarter 2023 results on Nov 6.
SWAV’s earnings surpassed estimates in three of the trailing four quarters and lagged in one, with the average surprise being 81.14%. The Zacks Consensus Estimate for ShockWave Medical’s fiscal 2023 third-quarter revenues indicates an improvement of 40.8% from the year-ago reported figure.
Inspire Medical Systems (INSP - Free Report) has an Earnings ESP of +29.81% and a Zacks Rank #3. The company is slated to release third-quarter 2023 results on Nov 7.
INSP’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 45.61%. The Zacks Consensus Estimate for Inspire Medical’s third-quarter 2023 EPS implies an increase of 11.7% from the year-ago reported figure.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.