We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
CRL Q1 Earnings & Revenues Top Estimates, Margins Crash, Stock Down
Read MoreHide Full Article
Key Takeaways
CRL posted Q1 adjusted EPS of $2.06 and revenues of $995.8M, both above estimates.
Charles River saw gross margin fall 269 bps and adjusted operating margin contract 64 bps.
CRL reaffirmed 2026 guidance and completed the CDMO and Cell Solutions divestiture.
Charles River Laboratories International, Inc. (CRL - Free Report) reported first-quarter 2026 adjusted earnings per share (EPS) of $2.06, down 12% year over year. The figure surpassed the Zacks Consensus Estimate by 5.1%.
On a GAAP basis, the company reported a loss of 30 cents per share compared with the year-ago quarter’s earnings of 50 cents.
CRL’s Revenues
Revenues totaled $995.8 million, which beat the Zacks Consensus Estimate by 2.5%. The top line rose 1.2% from the year-ago quarter’s level (down 1.5% 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 0.7% in the pre-market trading today.
CRL’s Q1 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 $208.4 million, down 2.2% year over year (down 5.5% organically). The organic decrease was mainly due to lower revenues for large research models and small research models in North America. Our model estimated RMS’ revenues to be $209.8 million in the first quarter.
Charles River Laboratories International, Inc. Price, Consensus and EPS Surprise
DSA’s revenues amounted to $596.9 million, up 0.7% year over year (down 1.4% organically). The organic decline in revenues was primarily due to lower revenues for discovery services, partly from the impact of prior site consolidation activities. Our model projected revenues of $579.9 million for this segment.
Manufacturing Solutions’ revenues totaled $190.5 million, up 6.8% year over year (up 2.9% organically). The organic growth was due to higher revenues in the Microbial Solutions business. Our model projected revenues to be $194.9 million for the first quarter.
CRL’s Margin Performance
The gross profit in the reported quarter was $294.7 million, down 7.3% from the prior-year quarter’s level. The gross margin of 29.6% fell 269 basis points (bps) year over year.
Selling, general & administrative expenses dropped 10.3% year over year to $159.4 million. The adjusted operating profit totaled $135.2 million, down 3.4% from the prior-year quarter’s level. The adjusted operating margin contracted 64 bps to 13.6%.
CRL’s Liquidity Position
Charles River exited the first quarter of 2026 with cash and cash equivalents of $191.8 million compared with $213.8 million at the end of 2025.
Cumulative net cash provided by operating activities at the end of the first quarter was $41.1 million compared with $171.7 million a year ago.
During the first quarter of 2026, Charles River repurchased 1.1 million shares for a total of $200.0 million. As of March 28, 2026, it had $800.0 million remaining under its $1.0 billion stock repurchase authorization that was approved by the board of directors on Oct. 29, 2025.
CRL’s Divestiture Update
On May 6, 2026, Charles River completed the divestiture of the CDMO and Cell Solutions businesses to GI Partners. It expects to complete the sale of certain European Discovery Services sites in May 2026. These strategic transactions are expected to help the company refocus its comprehensive portfolio on core competencies and drive synergistic growth in areas in which it has differentiated scientific expertise.
Charles River’s 2026 Guidance
The company last updated its full year guidance on Feb. 25, 2026, including the expected impact of the completed divestiture of the CDMO and Cell Solutions businesses, and the planned divestiture of certain European Discovery Services sites in May 2026.
Reported revenues for the year are now expected to grow (5.5)% - (4)%, from the previous (5.0)% - (3.5)% forecast. The Zacks Consensus Estimate for 2026 revenues is pegged at $3.97 billion, implying a 1.3% fall.
Adjusted EPS for 2026 is expected in the range of $10.80-$11.30. The Zacks Consensus Estimate for the metric is pegged at $10.97.
Our Take on CRL
Charles River exited the first quarter of 2026 with earnings and revenues beating estimates. The company delivered on the quarter’s targets and remains well-positioned to generate improving results throughout the year. By segment, organic revenue growth in the Manufacturing Solution was more than offset by organic revenue declines in the RMS and DSA segments. The contraction of both margins in the quarter is also discouraging.
Charles River reduced its 2026 reported revenue outlook by roughly 50 bps to reflect recent changes in assumptions for foreign exchange rates.
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 BrightSpring Health Services (BTSG - Free Report) , Intuitive Surgical (ISRG - Free Report) and Labcorp Holdings (LH - Free Report) .
BrightSpring Health Services, currently carrying a Zacks Rank #2 (Buy), reported first-quarter 2026 adjusted EPS of 36 cents, which surpassed the Zacks Consensus Estimate by 34.5%. Revenues of $3.61 billion beat the Zacks Consensus Estimate by 8.35%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
BTSG has an estimated long-term earnings growth rate of 47.2% compared with the industry’s 14.5% growth. The company topped earnings estimates in three of the trailing four quarters and missed on one occasion, the average surprise being 14.61%.
Intuitive Surgical,carrying a Zacks Rank #2 at present, posted first-quarter 2026 adjusted EPS of $2.50, exceeding the Zacks Consensus Estimate by 20.2%. Revenues of $2.77 billion outpaced the Zacks Consensus Estimate by 6.2%.
ISRG has an earnings yield of 2.1% compared to the industry’s negative 0.9% yield. The company’s earnings outpaced estimates in each of the trailing four quarters, the average surprise being 16.82%.
Labcorp,carrying a Zacks Rank #2 at present, posted first-quarter 2026 adjusted EPS of $4.25, exceeding the Zacks Consensus Estimate by 3.8%. Revenues of $3.54 billion outperformed the Zacks Consensus Estimate by 1%.
LH has an earnings yield of 6.9% compared with the industry’s 4.5% yield. The company’s earnings topped estimates in each of the trailing four quarters, the average surprise being 3.31%.
Zacks' 7 Best Strong Buy Stocks (New Research Report)
Valued at $99, click below to receive our just-released report
predicting the 7 stocks that will soar highest in the coming month.
View the Zacks #1 Rank List
Image: Bigstock
CRL Q1 Earnings & Revenues Top Estimates, Margins Crash, Stock Down
Key Takeaways
Charles River Laboratories International, Inc. (CRL - Free Report) reported first-quarter 2026 adjusted earnings per share (EPS) of $2.06, down 12% year over year. The figure surpassed the Zacks Consensus Estimate by 5.1%.
On a GAAP basis, the company reported a loss of 30 cents per share compared with the year-ago quarter’s earnings of 50 cents.
CRL’s Revenues
Revenues totaled $995.8 million, which beat the Zacks Consensus Estimate by 2.5%. The top line rose 1.2% from the year-ago quarter’s level (down 1.5% 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 0.7% in the pre-market trading today.
CRL’s Q1 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 $208.4 million, down 2.2% year over year (down 5.5% organically). The organic decrease was mainly due to lower revenues for large research models and small research models in North America. Our model estimated RMS’ revenues to be $209.8 million in the first 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 $596.9 million, up 0.7% year over year (down 1.4% organically). The organic decline in revenues was primarily due to lower revenues for discovery services, partly from the impact of prior site consolidation activities. Our model projected revenues of $579.9 million for this segment.
Manufacturing Solutions’ revenues totaled $190.5 million, up 6.8% year over year (up 2.9% organically). The organic growth was due to higher revenues in the Microbial Solutions business. Our model projected revenues to be $194.9 million for the first quarter.
CRL’s Margin Performance
The gross profit in the reported quarter was $294.7 million, down 7.3% from the prior-year quarter’s level. The gross margin of 29.6% fell 269 basis points (bps) year over year.
Selling, general & administrative expenses dropped 10.3% year over year to $159.4 million. The adjusted operating profit totaled $135.2 million, down 3.4% from the prior-year quarter’s level. The adjusted operating margin contracted 64 bps to 13.6%.
CRL’s Liquidity Position
Charles River exited the first quarter of 2026 with cash and cash equivalents of $191.8 million compared with $213.8 million at the end of 2025.
Cumulative net cash provided by operating activities at the end of the first quarter was $41.1 million compared with $171.7 million a year ago.
During the first quarter of 2026, Charles River repurchased 1.1 million shares for a total of $200.0 million. As of March 28, 2026, it had $800.0 million remaining under its $1.0 billion stock repurchase authorization that was approved by the board of directors on Oct. 29, 2025.
CRL’s Divestiture Update
On May 6, 2026, Charles River completed the divestiture of the CDMO and Cell Solutions businesses to GI Partners. It expects to complete the sale of certain European Discovery Services sites in May 2026. These strategic transactions are expected to help the company refocus its comprehensive portfolio on core competencies and drive synergistic growth in areas in which it has differentiated scientific expertise.
Charles River’s 2026 Guidance
The company last updated its full year guidance on Feb. 25, 2026, including the expected impact of the completed divestiture of the CDMO and Cell Solutions businesses, and the planned divestiture of certain European Discovery Services sites in May 2026.
Reported revenues for the year are now expected to grow (5.5)% - (4)%, from the previous (5.0)% - (3.5)% forecast. The Zacks Consensus Estimate for 2026 revenues is pegged at $3.97 billion, implying a 1.3% fall.
Adjusted EPS for 2026 is expected in the range of $10.80-$11.30. The Zacks Consensus Estimate for the metric is pegged at $10.97.
Our Take on CRL
Charles River exited the first quarter of 2026 with earnings and revenues beating estimates. The company delivered on the quarter’s targets and remains well-positioned to generate improving results throughout the year. By segment, organic revenue growth in the Manufacturing Solution was more than offset by organic revenue declines in the RMS and DSA segments. The contraction of both margins in the quarter is also discouraging.
Charles River reduced its 2026 reported revenue outlook by roughly 50 bps to reflect recent changes in assumptions for foreign exchange rates.
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 BrightSpring Health Services (BTSG - Free Report) , Intuitive Surgical (ISRG - Free Report) and Labcorp Holdings (LH - Free Report) .
BrightSpring Health Services, currently carrying a Zacks Rank #2 (Buy), reported first-quarter 2026 adjusted EPS of 36 cents, which surpassed the Zacks Consensus Estimate by 34.5%. Revenues of $3.61 billion beat the Zacks Consensus Estimate by 8.35%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
BTSG has an estimated long-term earnings growth rate of 47.2% compared with the industry’s 14.5% growth. The company topped earnings estimates in three of the trailing four quarters and missed on one occasion, the average surprise being 14.61%.
Intuitive Surgical,carrying a Zacks Rank #2 at present, posted first-quarter 2026 adjusted EPS of $2.50, exceeding the Zacks Consensus Estimate by 20.2%. Revenues of $2.77 billion outpaced the Zacks Consensus Estimate by 6.2%.
ISRG has an earnings yield of 2.1% compared to the industry’s negative 0.9% yield. The company’s earnings outpaced estimates in each of the trailing four quarters, the average surprise being 16.82%.
Labcorp,carrying a Zacks Rank #2 at present, posted first-quarter 2026 adjusted EPS of $4.25, exceeding the Zacks Consensus Estimate by 3.8%. Revenues of $3.54 billion outperformed the Zacks Consensus Estimate by 1%.
LH has an earnings yield of 6.9% compared with the industry’s 4.5% yield. The company’s earnings topped estimates in each of the trailing four quarters, the average surprise being 3.31%.