Charles River Laboratories's (NYSE:CRL) Q1: Strong Sales, Stock Jumps 22.4%

Yahoo

07-05-2025

Lab services company Charles River Laboratories (NYSE:CRL) reported Q1 CY2025 results exceeding the market's revenue expectations , but sales fell by 2.7% year on year to $984.2 million. Its non-GAAP profit of $2.34 per share was 12.8% above analysts' consensus estimates.
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Charles River Laboratories (CRL) Q1 CY2025 Highlights:
Revenue: $984.2 million vs analyst estimates of $941.3 million (2.7% year-on-year decline, 4.6% beat)
Adjusted EPS: $2.34 vs analyst estimates of $2.07 (12.8% beat)
Adjusted EBITDA: $208.2 million vs analyst estimates of $216.5 million (21.2% margin, 3.9% miss)
Management raised its full-year Adjusted EPS guidance to $9.55 at the midpoint, a 2.1% increase
Operating Margin: 7.6%, down from 12.5% in the same quarter last year
Free Cash Flow Margin: 11.4%, up from 5% in the same quarter last year
Organic Revenue fell 1.8% year on year (-3.3% in the same quarter last year)
Market Capitalization: $5.67 billion
James C. Foster, Chair, President and Chief Executive Officer, said, 'The first quarter demonstrated continued signs of demand stabilization, highlighted by a notable improvement in DSA booking activity to the highest level in two years. This positive development was tempered by the general undertone of uncertainty in the broader market environment, which has led us to a balanced yet cautious view of the remainder of the year. Taking these factors into account, we are modestly increasing our financial guidance for 2025.'
Company Overview
Named after the Massachusetts river where it was founded in 1947, Charles River Laboratories (NYSE:CRL) provides non-clinical drug development services, research models, and manufacturing support to pharmaceutical and biotechnology companies.
Sales Growth
A company's long-term performance is an indicator of its overall quality. Any business can put up a good quarter or two, but many enduring ones grow for years. Luckily, Charles River Laboratories's sales grew at a decent 8.1% compounded annual growth rate over the last five years. Its growth was slightly above the average healthcare company and shows its offerings resonate with customers.
Charles River Laboratories Quarterly Revenue
Long-term growth is the most important, but within healthcare, a half-decade historical view may miss new innovations or demand cycles. Charles River Laboratories's recent performance shows its demand has slowed as its revenue was flat over the last two years.
Charles River Laboratories Year-On-Year Revenue Growth
We can better understand the company's sales dynamics by analyzing its organic revenue, which strips out one-time events like acquisitions and currency fluctuations that don't accurately reflect its fundamentals. Over the last two years, Charles River Laboratories's organic revenue was flat. Because this number aligns with its normal revenue growth, we can see the company's core operations (not acquisitions and divestitures) drove most of its results.