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Charles River Q3 Earnings & Revenues Top Estimates, Stock Rises
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Key Takeaways
Charles River's third-quarter adjusted earnings climbed 27.2% to $3.09 per share, beating expectations.
Strong organic growth in CRL's DSA and Manufacturing Solutions drove performance, offsetting RMS weakness.
Charles River raised 2026 adjusted EPS guidance to $11.35-$11.55 and improved its revenue outlook.
Charles River Laboratories International, Inc. (CRL - Free Report) reported third-quarter 2026 adjusted earnings per share (EPS) of $3.09, up 27.2% year over year. The metric beat the Zacks Consensus Estimate by 3.69%.
On a GAAP basis, the company reported earnings of $6.86 per share compared with $1.10 in the year-ago quarter.
Revenues totaled $982.7 million, down 2.2% year over year (up 4.7% organically). The figure topped the Zacks Consensus Estimate by 2.71%.
Following the announcement, CRL shares climbed 2.9% in the pre-market session today.
Charles River'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 $207.5 million, down 2.8% year over year (down 0.6% organically). The organic decline primarily reflected lower revenues for small research models in North America and large research models. Higher revenues for small research models in China and research model services, particularly Insourcing Solutions, provided some offset.
Charles River Laboratories International, Inc. Price, Consensus and EPS Surprise
DSA's revenues amounted to $596.3 million, down 0.7% year over year (up 5.9% organically). The reported decrease primarily reflected the divestiture of certain European Discovery Services sites. Organic growth was mainly driven by higher study volumes for regulated safety assessment services.
Manufacturing Solutions' revenues totaled $178.9 million, down 6.2% year over year (up 7.4% organically). The reported decline reflected the CDMO divestiture, while strong demand across the Biologics Testing Solutions and Microbial Solutions businesses supported organic growth.
CRL’s Margin Performance
The gross profit in the reported quarter was $357.9 million, up 5.6% from the prior-year quarter’s level. The gross margin of 36.4% expanded 270 basis points (bps) year over year.
Selling, general & administrative expenses dropped 20.8% year over year to $140.6 million. The adjusted operating profit totaled $225.8 million, up 14.2% from the prior-year quarter’s level. The adjusted operating margin expanded 330 bps to 23.0%.
Charles River's Liquidity Position
Charles River exited the third quarter with cash and cash equivalents of $200.4 million compared with $213.8 million at the end of 2025.
During the first nine months of 2026, cumulative net cash provided by operating activities totaled $474.9 million compared with $590.1 million a year ago. Capital expenditures increased to $133.8 million from $130.2 million.
The company spent $324.1 million on treasury stock purchases during the nine-month period. Long-term debt, net of finance leases, stood at $2.44 billion at the quarter's end compared with $2.14 billion at the end of 2025.
CRL Raises 2026 Guidance
Charles River raised its full-year 2026 outlook for revenues and adjusted earnings, primarily reflecting better-than-expected third-quarter performance in DSA and a lower tax rate.
Reported revenues are now expected to decline 1.5-2% compared with the previous forecast of a 2.5-3.5% drop. Organic revenue growth is expected to be at least 1.5%, up from the earlier projection of 0-1% growth. The Zacks Consensus Estimate for 2026 revenues stands at $3.91 billion at present.
Adjusted EPS is now projected between $11.35 and $11.55 compared with the previous guidance of $11.15-$11.45. The Zacks Consensus Estimate for 2026 adjusted EPS is pegged at $11.35.
Charles River's Strategic and Operational Updates
Charles River unveiled its Pathway to Purpose strategic vision and Create the Future initiative on its 2026 Investor Day. These initiatives aim to strengthen operational efficiency, scientific leadership and long-term value creation.
The company also advanced manufacturing modernization through its Endosafe Cartridge Technology Automated Manufacturing Suite. Its partnership with Autolomous introduced Apollo Orchestrate, designed to digitize laboratory workflows and improve operational efficiency.
Charles River strengthened its scientific capabilities through an FDA collaboration to validate preclinical screening tools and expanded its Alternative Methods Advancement Project initiative with new cell banking capabilities and virtual control group methodologies.
Our Take on CRL Stock
Charles River exited the third quarter of 2026 with earnings and revenues beating estimates. The company's return to organic revenue growth for the second consecutive quarter, along with strong margin expansion, is encouraging. Segment-wise, solid organic revenue growth in DSA and Manufacturing Solutions more than offset the modest decline in RMS. Higher study volumes for regulated safety assessment services and strong demand across the Manufacturing businesses supported the performance.
The expansion of both gross and adjusted operating margins is encouraging, reflecting improved operating efficiency. The upward revision to the company's 2026 revenue and earnings outlook also raises optimism. However, the year-over-year decline in reported revenues, continued weakness in RMS and lower operating cash flow remain concerning.
CRL’s Zacks Rank & Key Picks
Charles River currently carries a Zacks Rank #3 (Hold).
Bausch + Lomb, sporting a Zacks Rank #1 (Strong Buy) at present, posted third-quarter 2026 adjusted EPS of 34 cents, exceeding the Zacks Consensus Estimate by 61.91%. Revenues of $1.28 billion topped the Zacks Consensus Estimate by 0.14%. You can see the complete list of today’s Zacks #1 Rank stocks here.
BLCO has an estimated long-term earnings growth rate of 40.1% compared with the industry’s 13.5% growth. The company’s earnings outpaced estimates in three of the trailing four quarters and missed on one occasion, the average surprise being 21.67%.
Medpace, carrying a Zacks Rank #2 (Buy), reported third-quarter 2026 adjusted EPS of $4.84, which surpassed the Zacks Consensus Estimate by 8.76%. Revenues of $716 million beat the Zacks Consensus Estimate by 1.02%.
MEDP has an estimated long-term earnings growth rate of 14.3% compared with the industry’s 13.2% growth. The company outperformed earnings estimates in each of the trailing four quarters, the average surprise being 9.77%.
Intuitive Surgical, carrying a Zacks Rank #2 at present, posted third-quarter 2026 adjusted EPS of $3.00, exceeding the Zacks Consensus Estimate by 14.94%. Revenues of $3.05 billion topped the Zacks Consensus Estimate by 5.84%.
ISRG has an earnings yield of 2.5% against the industry’s negative 2.1% yield. The company’s earnings outpaced estimates in each of the trailing four quarters, the average surprise being 15.12%.
View the Zacks #1 Rank List
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Charles River Q3 Earnings & Revenues Top Estimates, Stock Rises
Key Takeaways
Charles River Laboratories International, Inc. (CRL - Free Report) reported third-quarter 2026 adjusted earnings per share (EPS) of $3.09, up 27.2% year over year. The metric beat the Zacks Consensus Estimate by 3.69%.
On a GAAP basis, the company reported earnings of $6.86 per share compared with $1.10 in the year-ago quarter.
Revenues totaled $982.7 million, down 2.2% year over year (up 4.7% organically). The figure topped the Zacks Consensus Estimate by 2.71%.
Following the announcement, CRL shares climbed 2.9% in the pre-market session today.
Charles River'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 $207.5 million, down 2.8% year over year (down 0.6% organically). The organic decline primarily reflected lower revenues for small research models in North America and large research models. Higher revenues for small research models in China and research model services, particularly Insourcing Solutions, provided some offset.
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 $596.3 million, down 0.7% year over year (up 5.9% organically). The reported decrease primarily reflected the divestiture of certain European Discovery Services sites. Organic growth was mainly driven by higher study volumes for regulated safety assessment services.
Manufacturing Solutions' revenues totaled $178.9 million, down 6.2% year over year (up 7.4% organically). The reported decline reflected the CDMO divestiture, while strong demand across the Biologics Testing Solutions and Microbial Solutions businesses supported organic growth.
CRL’s Margin Performance
The gross profit in the reported quarter was $357.9 million, up 5.6% from the prior-year quarter’s level. The gross margin of 36.4% expanded 270 basis points (bps) year over year.
Selling, general & administrative expenses dropped 20.8% year over year to $140.6 million. The adjusted operating profit totaled $225.8 million, up 14.2% from the prior-year quarter’s level. The adjusted operating margin expanded 330 bps to 23.0%.
Charles River's Liquidity Position
Charles River exited the third quarter with cash and cash equivalents of $200.4 million compared with $213.8 million at the end of 2025.
During the first nine months of 2026, cumulative net cash provided by operating activities totaled $474.9 million compared with $590.1 million a year ago. Capital expenditures increased to $133.8 million from $130.2 million.
The company spent $324.1 million on treasury stock purchases during the nine-month period. Long-term debt, net of finance leases, stood at $2.44 billion at the quarter's end compared with $2.14 billion at the end of 2025.
CRL Raises 2026 Guidance
Charles River raised its full-year 2026 outlook for revenues and adjusted earnings, primarily reflecting better-than-expected third-quarter performance in DSA and a lower tax rate.
Reported revenues are now expected to decline 1.5-2% compared with the previous forecast of a 2.5-3.5% drop. Organic revenue growth is expected to be at least 1.5%, up from the earlier projection of 0-1% growth. The Zacks Consensus Estimate for 2026 revenues stands at $3.91 billion at present.
Adjusted EPS is now projected between $11.35 and $11.55 compared with the previous guidance of $11.15-$11.45. The Zacks Consensus Estimate for 2026 adjusted EPS is pegged at $11.35.
Charles River's Strategic and Operational Updates
Charles River unveiled its Pathway to Purpose strategic vision and Create the Future initiative on its 2026 Investor Day. These initiatives aim to strengthen operational efficiency, scientific leadership and long-term value creation.
The company also advanced manufacturing modernization through its Endosafe Cartridge Technology Automated Manufacturing Suite. Its partnership with Autolomous introduced Apollo Orchestrate, designed to digitize laboratory workflows and improve operational efficiency.
Charles River strengthened its scientific capabilities through an FDA collaboration to validate preclinical screening tools and expanded its Alternative Methods Advancement Project initiative with new cell banking capabilities and virtual control group methodologies.
Our Take on CRL Stock
Charles River exited the third quarter of 2026 with earnings and revenues beating estimates. The company's return to organic revenue growth for the second consecutive quarter, along with strong margin expansion, is encouraging. Segment-wise, solid organic revenue growth in DSA and Manufacturing Solutions more than offset the modest decline in RMS. Higher study volumes for regulated safety assessment services and strong demand across the Manufacturing businesses supported the performance.
The expansion of both gross and adjusted operating margins is encouraging, reflecting improved operating efficiency. The upward revision to the company's 2026 revenue and earnings outlook also raises optimism. However, the year-over-year decline in reported revenues, continued weakness in RMS and lower operating cash flow remain concerning.
CRL’s Zacks Rank & Key Picks
Charles River currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks from the broader medical space are Bausch + Lomb (BLCO - Free Report) , Medpace (MEDP - Free Report) and Intuitive Surgical (ISRG - Free Report)
Bausch + Lomb, sporting a Zacks Rank #1 (Strong Buy) at present, posted third-quarter 2026 adjusted EPS of 34 cents, exceeding the Zacks Consensus Estimate by 61.91%. Revenues of $1.28 billion topped the Zacks Consensus Estimate by 0.14%. You can see the complete list of today’s Zacks #1 Rank stocks here.
BLCO has an estimated long-term earnings growth rate of 40.1% compared with the industry’s 13.5% growth. The company’s earnings outpaced estimates in three of the trailing four quarters and missed on one occasion, the average surprise being 21.67%.
Medpace, carrying a Zacks Rank #2 (Buy), reported third-quarter 2026 adjusted EPS of $4.84, which surpassed the Zacks Consensus Estimate by 8.76%. Revenues of $716 million beat the Zacks Consensus Estimate by 1.02%.
MEDP has an estimated long-term earnings growth rate of 14.3% compared with the industry’s 13.2% growth. The company outperformed earnings estimates in each of the trailing four quarters, the average surprise being 9.77%.
Intuitive Surgical, carrying a Zacks Rank #2 at present, posted third-quarter 2026 adjusted EPS of $3.00, exceeding the Zacks Consensus Estimate by 14.94%. Revenues of $3.05 billion topped the Zacks Consensus Estimate by 5.84%.
ISRG has an earnings yield of 2.5% against the industry’s negative 2.1% yield. The company’s earnings outpaced estimates in each of the trailing four quarters, the average surprise being 15.12%.