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CRL Gears Up for Q3 Earnings: Here's What You Need to Know
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Charles River Laboratories International, Inc. (CRL - Free Report) is scheduled to report third-quarter 2024 results on Nov. 6, before market open.
In the last reported quarter, the company’s adjusted earnings per share of $2.80 surpassed the Zacks Consensus Estimate by 17.2%. Earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 11.64%.
Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
CRL’s Q3 Estimates
The Zacks Consensus Estimate for revenues is pegged at $977.5 billion, suggesting a 4.8% decline from the year-ago reported figure.
The Zacks Consensus Estimate for earnings per share of $2.43 indicates a 10.7% decline year over year.
Estimate Revision Trend Ahead of Earnings
Estimates for Charles River’s third-quarter earnings have moved north 0.4% to $2.43 per share in the past 30 days.
Let's take a look at how things might have shaped up for the MedTech major prior to the announcement.
Factors at Play
In the second quarter, the company’s Research Models and Services (RMS) segment faced headwinds from NHP shipment, which caused revenues to decline. However, eliminating the NHP impact, RMS revenues were essentially flat year over year. This factor might have continued to hurt the company’s top line in the to-be-reported quarter.
Revenues for small models continued to increase in all geographies, particularly in China and Europe, during the second quarter. In line with this, business in China was resilient despite the macroeconomic pressures. Due to a dull biopharma demand environment, research model services experienced a slight revenue decline in the second quarter in both GEMS and Insourcing Solutions. We expect these trends to continue in the third quarter.
Per our model estimate, Charles River’s RMS business revenues should be $191.1 million for the quarter, suggesting a 2.3% growth year over year.
The Discovery and Safety Assessment (DSA) arm is likely to have maintained the trend of second-quarter revenue decline, driven by lower revenues in both the Discovery Services and Safety Assessment businesses. Lately, the DSA backlog has been decreasing sequentially. In the previous earnings call, the company mentioned that it doesn’t expect these trends to improve during the second half of the year. Also, DSA revenues are likely to have been adversely impacted by incremental spending pressures from the global biopharmaceutical client base.
During the third quarter, the company initiated several collaboration agreements to boost the DSA segment. These include a collaboration with Autobahn Labs — a Samsara BioCapital-backed virtual accelerator for academic biotech. The agreement established Charles River as the preferred partner for Autobahn Labs, leveraging drug discovery and development capabilities to accelerate the translation of academic discoveries into novel therapeutics. Additionally, in September, Charles River and Insightec — a global healthcare company dedicated to using focused ultrasound to transform patient care — inked a five-year strategic collaboration. The objective was to give Charles River’s clients access to a comprehensive global service and technology platform for the application of focused ultrasound for drug discovery and preclinical development of therapeutics in neuroscience.
Charles River also entered into a strategic collaboration with CEBINA GmbH, Central European Biotech Incubator and Accelerator in September, focusing on identifying and advancing pioneering academic research projects with the potential to create new drugs and innovative technologies in the field of neurodegeneration. We expect these developments to have a positive impact on the company’s third-quarter revenues.
Charles River Laboratories International, Inc. Price and EPS Surprise
Per our model estimate, Charles River’s DSA business revenues should be $597.6 million in the third quarter, suggesting a 10% decline year over year.
The Manufacturing Solution segment is likely to have been driven by revenue growth across all its businesses.
In the second quarter, the contract development and manufacturing organization (CDMO) business within the segment performed well, and client interest remained strong. Revenues from manufacturing quality control testing business — Biologics Testing and Microbial Solutions — also continued to grow, rebounding from the more challenging market environment last year. We expect this trend to have continued throughout the quarter under review.
We are also upbeat about Charles River’s CDMO collaborations in the quarter to be reported. The company collaborated with FOXG1 Research Foundation, highlighting the patient advocacy group’s model of independently driving drug development through the clinical phase.
Per our model estimate, Charles River’s Manufacturing business revenues should total $189 million for the to-be-reported quarter, suggesting 7.5% growth year over year.
What Our Model Suggests for CRL
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 a higher chance of beating on earnings, which is not the case here.
Earnings ESP: STERIS has an Earnings ESP of 0.76%. 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 #4.
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 reporting cycle.
The company is expected to release third-quarter 2024 results soon. AVIR’s earnings surpassed estimates in two of the trailing four quarters and missed in the other two, the average surprise being 5.23%.
RadNet (RDNT - Free Report) has an Earnings ESP of +20.00% and a Zacks Rank #2 at present. The company is expected to release third-quarter 2024 results shortly.
RDNT’s earnings surpassed estimates in three of the trailing four quarters and met the same in one, the average surprise being 98.23%. The Zacks Consensus Estimate for RadNet’s third-quarter EPS implies an increase of 7.14% from the year-ago quarter’s reported figure.
TransMedics Group (TMDX - Free Report) has an Earnings ESP of +26.63% and a Zacks Rank #3 at present. The company is scheduled to release third-quarter 2024 results on Oct. 28. The Zacks Consensus Estimate for EPS implies a surge of 333.3% from the year-ago quarter’s reported actuals.
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CRL Gears Up for Q3 Earnings: Here's What You Need to Know
Charles River Laboratories International, Inc. (CRL - Free Report) is scheduled to report third-quarter 2024 results on Nov. 6, before market open.
In the last reported quarter, the company’s adjusted earnings per share of $2.80 surpassed the Zacks Consensus Estimate by 17.2%. Earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 11.64%.
Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
CRL’s Q3 Estimates
The Zacks Consensus Estimate for revenues is pegged at $977.5 billion, suggesting a 4.8% decline from the year-ago reported figure.
The Zacks Consensus Estimate for earnings per share of $2.43 indicates a 10.7% decline year over year.
Estimate Revision Trend Ahead of Earnings
Estimates for Charles River’s third-quarter earnings have moved north 0.4% to $2.43 per share in the past 30 days.
Let's take a look at how things might have shaped up for the MedTech major prior to the announcement.
Factors at Play
In the second quarter, the company’s Research Models and Services (RMS) segment faced headwinds from NHP shipment, which caused revenues to decline. However, eliminating the NHP impact, RMS revenues were essentially flat year over year. This factor might have continued to hurt the company’s top line in the to-be-reported quarter.
Revenues for small models continued to increase in all geographies, particularly in China and Europe, during the second quarter. In line with this, business in China was resilient despite the macroeconomic pressures. Due to a dull biopharma demand environment, research model services experienced a slight revenue decline in the second quarter in both GEMS and Insourcing Solutions. We expect these trends to continue in the third quarter.
Per our model estimate, Charles River’s RMS business revenues should be $191.1 million for the quarter, suggesting a 2.3% growth year over year.
The Discovery and Safety Assessment (DSA) arm is likely to have maintained the trend of second-quarter revenue decline, driven by lower revenues in both the Discovery Services and Safety Assessment businesses. Lately, the DSA backlog has been decreasing sequentially. In the previous earnings call, the company mentioned that it doesn’t expect these trends to improve during the second half of the year. Also, DSA revenues are likely to have been adversely impacted by incremental spending pressures from the global biopharmaceutical client base.
During the third quarter, the company initiated several collaboration agreements to boost the DSA segment. These include a collaboration with Autobahn Labs — a Samsara BioCapital-backed virtual accelerator for academic biotech. The agreement established Charles River as the preferred partner for Autobahn Labs, leveraging drug discovery and development capabilities to accelerate the translation of academic discoveries into novel therapeutics. Additionally, in September, Charles River and Insightec — a global healthcare company dedicated to using focused ultrasound to transform patient care — inked a five-year strategic collaboration. The objective was to give Charles River’s clients access to a comprehensive global service and technology platform for the application of focused ultrasound for drug discovery and preclinical development of therapeutics in neuroscience.
Charles River also entered into a strategic collaboration with CEBINA GmbH, Central European Biotech Incubator and Accelerator in September, focusing on identifying and advancing pioneering academic research projects with the potential to create new drugs and innovative technologies in the field of neurodegeneration. We expect these developments to have a positive impact on the company’s third-quarter revenues.
Charles River Laboratories International, Inc. Price and EPS Surprise
Charles River Laboratories International, Inc. price-eps-surprise | Charles River Laboratories International, Inc. Quote
Per our model estimate, Charles River’s DSA business revenues should be $597.6 million in the third quarter, suggesting a 10% decline year over year.
The Manufacturing Solution segment is likely to have been driven by revenue growth across all its businesses.
In the second quarter, the contract development and manufacturing organization (CDMO) business within the segment performed well, and client interest remained strong. Revenues from manufacturing quality control testing business — Biologics Testing and Microbial Solutions — also continued to grow, rebounding from the more challenging market environment last year. We expect this trend to have continued throughout the quarter under review.
We are also upbeat about Charles River’s CDMO collaborations in the quarter to be reported. The company collaborated with FOXG1 Research Foundation, highlighting the patient advocacy group’s model of independently driving drug development through the clinical phase.
Per our model estimate, Charles River’s Manufacturing business revenues should total $189 million for the to-be-reported quarter, suggesting 7.5% growth year over year.
What Our Model Suggests for CRL
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 a higher chance of beating on earnings, which is not the case here.
Earnings ESP: STERIS has an Earnings ESP of 0.76%. 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 #4.
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 reporting cycle.
Atea Pharmaceuticals (AVIR - Free Report) has an Earnings ESP of +13.13% and a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The company is expected to release third-quarter 2024 results soon. AVIR’s earnings surpassed estimates in two of the trailing four quarters and missed in the other two, the average surprise being 5.23%.
RadNet (RDNT - Free Report) has an Earnings ESP of +20.00% and a Zacks Rank #2 at present. The company is expected to release third-quarter 2024 results shortly.
RDNT’s earnings surpassed estimates in three of the trailing four quarters and met the same in one, the average surprise being 98.23%. The Zacks Consensus Estimate for RadNet’s third-quarter EPS implies an increase of 7.14% from the year-ago quarter’s reported figure.
TransMedics Group (TMDX - Free Report) has an Earnings ESP of +26.63% and a Zacks Rank #3 at present. The company is scheduled to release third-quarter 2024 results on Oct. 28. The Zacks Consensus Estimate for EPS implies a surge of 333.3% from the year-ago quarter’s reported actuals.