Charles River stock falls nearly 10% on soft quarterly results

By Zachary Brennan contact

- Last updated on GMT

Charles River stock falls nearly 10% on soft quarterly results

Related tags: National cancer institute, Remainder, Revenue

Charles River Laboratories saw only slight growth in revenue compared to the same quarter last year, which was driven by its safety assessment and endotoxin and microbial detection businesses, and double-digit revenue increases from mid-tier biotech clients.

The drop in growth comes as research model revenue in Europe and Japan “continued to be soft​,” and research models on the whole continued to decline following the loss of a NCI (National Cancer Institute) contract​, James Foster, Chairman, President and CEO, said Thursday. The company’s stock fell on Thursday by nearly 10%.

First-quarter diluted earnings per share on a non-GAAP basis also decreased 3.7% compared to Q1 2014, which the company said can be attributed to a significantly smaller gain from its limited partnership investments.

Early discovery acquisitions in 2014, which include Argenta​, BioFocus​, and ChanTest​, contributed 8% to consolidated first-quarter revenue growth, both on a reported basis and in constant currency.

James Foster, noted in the conference call, “Improving trends in March and April give us confidence in a stronger second-quarter performance and for the remainder of the year.”

Moving forward for the full year, CRL is increasing its guidance for constant-currency revenue growth to a range of 6.5% to 8.0% in 2015, though due to a more negative effect from foreign currency translation, the company is maintaining its guidance for non-GAAP earnings per share in a range from $3.55 to $3.65.

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