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CRL's Q3 Earnings Top Estimates, Revenues Decline Y/Y, Stock Falls
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Key Takeaways
Charles River's Q3 adjusted EPS of $2.43 beat estimates but fell 6.2% year over year.
CRL's Q3 revenues of $1.00B topped forecasts, though down 0.5% from the prior year.
CRL narrowed 2025 guidance after mixed segment results and margin contraction.
Charles River Laboratories International, Inc. (CRL - Free Report) reported third-quarter 2025 adjusted earnings per share (EPS) of $2.43, down 6.2% year over year. However, the figure surpassed the Zacks Consensus Estimate by 4.74%.
On a GAAP basis, the company reported earnings of $1.10 per share compared with the year-ago quarter’s level of $1.33.
CRL’s Q3 Revenues
Revenues totaled $1.00 billion, which beat the Zacks Consensus Estimate by 2.06%. However, the top line fell 0.5% from the year-ago quarter’s level (down 1.6% organically, excluding the impact of foreign currency translation and the divestiture of a small Safety Assessment site in 2024).
Following the announcement, CRL shares fell 0.5% in the pre-market trading today.
CRL’s Q3 Segmental Performance in Detail
The company reports under three segments — Research Models and Services (“RMS”), Discovery and Safety Assessment (“DSA”) and Manufacturing Solutions.
RMS’ revenues totaled $213.5 million, up 7.9% year over year (up 6.5% organically). The organic growth was primarily due to higher revenues for large research model products. Our model estimated RMS business revenues to be $210.7 million in the third quarter.
Charles River Laboratories International, Inc. Price, Consensus and EPS Surprise
DSA’s revenues amounted to $600.7 million, down 2.3% year over year and 3.1% organically. The organic decline in revenues can be attributed to lower sales volume for both discovery and regulated safety assessment services. Our model projected revenues of $572.2 million for this segment.
Manufacturing Solutions’ revenues totaled $190.7 million, down 3.1% year over year (down 5.1% organically).
The decrease was mainly due to lower revenues in the CDMO and Biologics Testing businesses, partially offset by higher revenues in the Microbial Solutions business.Our model projected revenues to be $195.6 million for the third quarter.
CRL’s Margin Performance
The gross profit in the reported quarter was $338.8 million, down 2.9% from the prior-year quarter’s level. The gross margin of 33.7% fell 85 basis points (bps) year over year.
Selling, general & administrative expenses dropped 10.8% year over year to $177.6 million. The adjusted operating profit totaled $161.2 million, reflecting a 7.6% increase from the prior-year quarter’s level. The adjusted operating margin expanded 121 bps to 16%.
CRL’s Liquidity Position
Charles River exited the third quarter of 2025 with cash and cash equivalents of $207.1 million compared with $182.8 million at the end of the second quarter.
Cumulative net cash provided by operating activities at the end of the third quarter was $590.1 million compared with $575.2 million a year ago.
Charles River’s 2025 Guidance
For 2025, the company now expects total revenues between (1.5%) and (0.5%), down from the previous estimate of (2.5%)-(0.5%). Organically, revenues are projected between (2.5%) and (1.5%), down from the previous (3%)-(1%) range. The Zacks Consensus Estimate for 2025 revenues is pegged at $3.98 billion, implying a decline of 1.7%.
Adjusted EPS for 2025 is expected in the range of $10.10-$10.30 (previously $9.90-$10.30). The Zacks Consensus Estimate for the metric is pegged at $10.17.
Our Take on CRL
Charles River exited the third quarter of 2025 with earnings and revenues beating estimates. However, both metrics were down on a year-over-year basis. Except DSA, the other segments posted a revenue decline in the quarter. The contraction of the gross margin is discouraging. Based on the performance, the company narrowed its full-year outlook.
Meanwhile, CRL management noted stable demand across its broad portfolio of early-stage research and manufacturing products and services. While positive signals suggest the industry may be on a path toward recovery, the company cautioned that sustained improvement in its business will take time.
CRL’s Zacks Rank and Key Picks
Charles River currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks from the broader medical space are Medpace Holdings (MEDP - Free Report) , Intuitive Surgical (ISRG - Free Report) and Boston Scientific (BSX - Free Report) .
Medpace, currently sporting a Zacks Rank #1 (Strong Buy), reported a third-quarter 2025 EPS of $3.86, which surpassed the Zacks Consensus Estimate by 10.29%. Revenues of $659.9 million beat the Zacks Consensus Estimate by 3.04%. You can see the complete list of today’s Zacks #1 Rank stocks here.
MEDP has an estimated earnings growth rate of 17.1% for 2025 compared with the industry’s 16.6% growth. The company beat earnings estimates in each of the trailing four quarters, the average surprise being 14.28%.
Intuitive Surgical, carrying a Zacks Rank #2 (Buy) at present, posted a third-quarter 2025 adjusted EPS of $2.40, exceeding the Zacks Consensus Estimate by 20.6%. Revenues of $2.51 billion topped the Zacks Consensus Estimate by 3.9%.
ISRG has an estimated long-term earnings growth rate of 15.7% compared with the industry’s 11.9% growth. The company’s earnings outpaced estimates in each of the trailing four quarters, the average surprise being 16.34%.
Boston Scientific, currently carrying a Zacks Rank #2, reported a third-quarter 2025 adjusted EPS of 75 cents, which surpassed the Zacks Consensus Estimate by 5.6%. Revenues of $5.07 billion outperformed the Zacks Consensus Estimate by 1.9%.
BSX has an estimated long-term earnings growth rate of 16.4% compared with the industry’s 13.5% growth. The company’s earnings beat estimates in each of the trailing four quarters, the average surprise being 7.36%.
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CRL's Q3 Earnings Top Estimates, Revenues Decline Y/Y, Stock Falls
Key Takeaways
Charles River Laboratories International, Inc. (CRL - Free Report) reported third-quarter 2025 adjusted earnings per share (EPS) of $2.43, down 6.2% year over year. However, the figure surpassed the Zacks Consensus Estimate by 4.74%.
On a GAAP basis, the company reported earnings of $1.10 per share compared with the year-ago quarter’s level of $1.33.
CRL’s Q3 Revenues
Revenues totaled $1.00 billion, which beat the Zacks Consensus Estimate by 2.06%. However, the top line fell 0.5% from the year-ago quarter’s level (down 1.6% organically, excluding the impact of foreign currency translation and the divestiture of a small Safety Assessment site in 2024).
Following the announcement, CRL shares fell 0.5% in the pre-market trading today.
CRL’s Q3 Segmental Performance in Detail
The company reports under three segments — Research Models and Services (“RMS”), Discovery and Safety Assessment (“DSA”) and Manufacturing Solutions.
RMS’ revenues totaled $213.5 million, up 7.9% year over year (up 6.5% organically). The organic growth was primarily due to higher revenues for large research model products. Our model estimated RMS business revenues to be $210.7 million in the third quarter.
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
DSA’s revenues amounted to $600.7 million, down 2.3% year over year and 3.1% organically. The organic decline in revenues can be attributed to lower sales volume for both discovery and regulated safety assessment services. Our model projected revenues of $572.2 million for this segment.
Manufacturing Solutions’ revenues totaled $190.7 million, down 3.1% year over year (down 5.1% organically).
The decrease was mainly due to lower revenues in the CDMO and Biologics Testing businesses, partially offset by higher revenues in the Microbial Solutions business.Our model projected revenues to be $195.6 million for the third quarter.
CRL’s Margin Performance
The gross profit in the reported quarter was $338.8 million, down 2.9% from the prior-year quarter’s level. The gross margin of 33.7% fell 85 basis points (bps) year over year.
Selling, general & administrative expenses dropped 10.8% year over year to $177.6 million. The adjusted operating profit totaled $161.2 million, reflecting a 7.6% increase from the prior-year quarter’s level. The adjusted operating margin expanded 121 bps to 16%.
CRL’s Liquidity Position
Charles River exited the third quarter of 2025 with cash and cash equivalents of $207.1 million compared with $182.8 million at the end of the second quarter.
Cumulative net cash provided by operating activities at the end of the third quarter was $590.1 million compared with $575.2 million a year ago.
Charles River’s 2025 Guidance
For 2025, the company now expects total revenues between (1.5%) and (0.5%), down from the previous estimate of (2.5%)-(0.5%). Organically, revenues are projected between (2.5%) and (1.5%), down from the previous (3%)-(1%) range. The Zacks Consensus Estimate for 2025 revenues is pegged at $3.98 billion, implying a decline of 1.7%.
Adjusted EPS for 2025 is expected in the range of $10.10-$10.30 (previously $9.90-$10.30). The Zacks Consensus Estimate for the metric is pegged at $10.17.
Our Take on CRL
Charles River exited the third quarter of 2025 with earnings and revenues beating estimates. However, both metrics were down on a year-over-year basis. Except DSA, the other segments posted a revenue decline in the quarter. The contraction of the gross margin is discouraging. Based on the performance, the company narrowed its full-year outlook.
Meanwhile, CRL management noted stable demand across its broad portfolio of early-stage research and manufacturing products and services. While positive signals suggest the industry may be on a path toward recovery, the company cautioned that sustained improvement in its business will take time.
CRL’s Zacks Rank and Key Picks
Charles River currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks from the broader medical space are Medpace Holdings (MEDP - Free Report) , Intuitive Surgical (ISRG - Free Report) and Boston Scientific (BSX - Free Report) .
Medpace, currently sporting a Zacks Rank #1 (Strong Buy), reported a third-quarter 2025 EPS of $3.86, which surpassed the Zacks Consensus Estimate by 10.29%. Revenues of $659.9 million beat the Zacks Consensus Estimate by 3.04%. You can see the complete list of today’s Zacks #1 Rank stocks here.
MEDP has an estimated earnings growth rate of 17.1% for 2025 compared with the industry’s 16.6% growth. The company beat earnings estimates in each of the trailing four quarters, the average surprise being 14.28%.
Intuitive Surgical, carrying a Zacks Rank #2 (Buy) at present, posted a third-quarter 2025 adjusted EPS of $2.40, exceeding the Zacks Consensus Estimate by 20.6%. Revenues of $2.51 billion topped the Zacks Consensus Estimate by 3.9%.
ISRG has an estimated long-term earnings growth rate of 15.7% compared with the industry’s 11.9% growth. The company’s earnings outpaced estimates in each of the trailing four quarters, the average surprise being 16.34%.
Boston Scientific, currently carrying a Zacks Rank #2, reported a third-quarter 2025 adjusted EPS of 75 cents, which surpassed the Zacks Consensus Estimate by 5.6%. Revenues of $5.07 billion outperformed the Zacks Consensus Estimate by 1.9%.
BSX has an estimated long-term earnings growth rate of 16.4% compared with the industry’s 13.5% growth. The company’s earnings beat estimates in each of the trailing four quarters, the average surprise being 7.36%.