Charles River Laboratories (CRL - Free Report) reported first quarter 2013 earnings (excluding special items) of 63 cents per share, missing the Zacks Consensus Estimate of 71 cents. Earnings were roughly flat year over year.
Charles River’s net sales of $291.2 million increased 1.8% year over year in the first quarter of 2013. However, net sales missed the Zacks Consensus Estimate of $294 million. Foreign currency movements negatively impacted sales by 1.0% in the first quarter of 2013.
Quarter in Detail
Charles River operates through two segments -- Research Models & Services (RMS) and Preclinical Services (PCS).
Revenues from the RMS segment were $182.5 million in the first quarter of 2013, down 0.4% from the prior-year period.
Foreign currency movements hurt sales by 1.4% in the reported quarter. Excluding this impact, RMS segment revenues increased by 1.0% year over year.
The increase in RMS segment was due to stronger sales for the Endotoxin and Microbial Detection (EMD) business, which included the acquisitions of Accugenix and Vital River.
Revenues from the PCS segment were $108.7 million in the first quarter, up 5.8% year over year driven by increased sales to strategic relationship clients and mid-tier clients.
During the first quarter of 2013, Charles River repurchased shares worth $6.5 million (approximately 157,000 shares), subsequent to which the company has $48.4 million remaining under its $750 million repurchase program.
Outlook for 2013
Charles River updated its guidance for 2013. The company continues to expect adjusted earnings per share between $2.80 and $2.90 per share. The guidance excludes extraordinary charges primarily related to the company’s PCS facility in Massachusetts. The Zacks Consensus Estimate of $2.85 per share is well within the company’s guidance range.
However, Charles River lowered its 2013 net sales guidance on a reported basis due to the adverse impact of foreign exchange translations. Sales growth is now expected to be around 3.0% – 5.0% (previous projection: 4.0% – 6.0%). On a constant currency basis, sales are still expected to grow in the range of 4.0% –6.0%.
Currently, Charles River carries a Zacks Rank #3 (Hold). Right now, Omnicare Inc. , MedAssets, Inc. and Parexel International Corporation look better placed with a Zacks Rank #2 (Buy).