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Don't Overlook Charles River (CRL) International Revenue Trends While Assessing the Stock

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Have you looked into how Charles River Laboratories (CRL - Free Report) performed internationally during the quarter ending March 2024? Considering the widespread global presence of this medical research equipment and services provider, examining the trends in international revenues is essential for assessing its financial resilience and prospects for growth.

In the current era of a tightly interconnected global economy, the proficiency of a company to penetrate international markets significantly influences its financial health and trajectory of growth. For investors, the key is to grasp how reliant a company is on overseas markets, as this provides insights into the durability of its earnings, its ability to exploit different economic cycles, and its overall growth capabilities.

Being present in foreign markets serves as protection against local economic declines and helps benefit from more rapidly expanding economies. Yet, such expansion also introduces challenges related to currency fluctuations, geopolitical uncertainties and varied market behaviors.

Our review of CRL's last quarterly performance uncovered some notable trends in the revenue contributions from its international markets, which are commonly analyzed and tracked by Wall Street experts.

For the quarter, the company's total revenue amounted to $1.01 billion, experiencing a decline of 1.7% year over year. Next, we'll explore the breakdown of CRL's international revenue to understand the importance of its overseas business operations.

Unveiling Trends in CRL's International Revenues

Of the total revenue, $45.77 million came from Asia Pacific during the last fiscal quarter, accounting for 4.5%. This represented a surprise of -17.66% as analysts had expected the region to contribute $55.59 million to the total revenue. In comparison, the region contributed $57.92 million, or 5.7%, and $42.81 million, or 4.2%, to total revenue in the previous and year-ago quarters, respectively.

During the quarter, Other International, including Brazil and Israel contributed $16.75 million in revenue, making up 1.7% of the total revenue. When compared to the consensus estimate of $5.59 million, this meant a surprise of +199.66%. Looking back, Other International, including Brazil and Israel contributed $9.1 million, or 0.9%, in the previous quarter, and $2.81 million, or 0.3%, in the same quarter of the previous year.

Canada generated $110.4 million in revenues for the company in the last quarter, constituting 10.9% of the total. This represented a surprise of +4.52% compared to the $105.63 million projected by Wall Street analysts. Comparatively, in the previous quarter, Canada accounted for $130.03 million (12.8%), and in the year-ago quarter, it contributed $110.61 million (10.8%) to the total revenue.

Europe accounted for 27.3% of the company's total revenue during the quarter, translating to $276.32 million. Revenues from this region represented a surprise of +5.23%, with Wall Street analysts collectively expecting $262.59 million. When compared to the preceding quarter and the same quarter in the previous year, Europe contributed $271.47 million (26.8%) and $267.7 million (26%) to the total revenue, respectively.

Prospective Revenues in International Markets

For the current fiscal quarter, it is anticipated by Wall Street analysts that Charles River will report a total revenue of $1.04 billion, which reflects a decline of 1.9% from the same quarter in the previous year. The revenue contributions are expected to be 5.5% from Asia Pacific ($56.95 million), 0.2% from Other International, including Brazil and Israel ($2.44 million), 10.2% from Canada ($106.18 million) and 27.7% from Europe ($287.69 million).

For the full year, a total revenue of $4.22 billion is expected for the company, reflecting an increase of 2.1% from the year before. The revenues from Asia Pacific, Other International, including Brazil and Israel, Canada and Europe are expected to make up 5.3%, 0.4%, 10.6% and 26.8% of this total, corresponding to $224.66 million, $15.37 million, $448.62 million and $1.13 billion respectively.

Closing Remarks

Charles River's reliance on international markets for revenues offers both opportunities and risks. Hence, keeping an eye on its international revenue trends could significantly help forecast the company's prospects.

In an era of growing international ties and escalating geopolitical disputes, financial analysts on Wall Street pay keen attention to these developments to fine-tune their earnings estimations for businesses operating across borders. It's important to note, however, that a range of additional variables, like a company's local market status, also play a crucial role in shaping these forecasts.

Emphasizing a company's shifting earnings prospects is a key aspect of our approach at Zacks, especially since research has proven its substantial influence on a stock's price in the short run. This correlation is positively aligned, meaning that improved earnings projections tend to boost the stock's price.

Boasting a remarkable track record that's been externally verified, the Zacks Rank, our unique stock rating system, leverages changes in earnings projections to function as a reliable gauge for predicting short-term stock price movements.

At present, Charles River holds a Zacks Rank #3 (Hold). This ranking implies that its near-term performance might mirror the overall market movement. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Charles River's Recent Stock Market Performance

The stock has declined by 5.5% over the past month compared to the 1.3% rise of the Zacks S&P 500 composite. Meanwhile, the Zacks Medical sector, which includes Charles River, has increased 1.7% during this time frame. Over the past three months, the company's shares have experienced a loss of 6.9% relative to the S&P 500's 4.3% increase. Throughout this period, the sector overall has witnessed a 1% decrease.

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