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Jun 29, 2024
Charles River Labs Q2 2024 Earnings Report
Charles River Labs' performance was impacted by lower revenue in DSA and RMS segments, offset by growth in Manufacturing Solutions, with revised guidance reflecting weaker demand trends.
Key Takeaways
Charles River Laboratories reported a 3.2% decrease in second-quarter revenue to $1.03 billion, driven by declines in Discovery and Safety Assessment (DSA) and Research Models and Services (RMS) segments, partially offset by growth in Manufacturing Solutions. GAAP EPS was $1.74, while non-GAAP EPS was $2.80. The company revised its 2024 guidance due to softer demand trends, particularly from biopharmaceutical clients.
Second-quarter revenue decreased by 3.2% to $1.03 billion, with organic revenue also declining by 3.2%.
GAAP operating margin decreased to 14.8%, while non-GAAP operating margin increased to 21.3%.
GAAP EPS decreased to $1.74, while non-GAAP EPS increased to $2.80.
The company's Board of Directors approved a new stock repurchase authorization of $1.0 billion.
Charles River Labs
Charles River Labs
Charles River Labs Revenue by Segment
Revenue by Segment
Research Models and Services Revenue
CapyFin.comDiscovery and Safety Assessment Revenue
CapyFin.comManufacturing Solutions Revenue
CapyFin.com Forward Guidance
Charles River Laboratories revised its 2024 financial guidance due to the lack of recovery in demand from small and mid-sized biotechnology clients and softer demand trends from global biopharmaceutical clients.
Positive Outlook
- Implementing restructuring initiatives expected to result in over $150 million in annualized cost savings.
- Approximately $100 million of the cost savings will be realized in 2024.
- Aggressively managing cost structure.
- Initiating new and innovative ways to transform the business.
- Enhancing commercial efforts to win new business.
Challenges Ahead
- Revenue growth, reported is expected to be between (4.5)% – (2.5)%.
- Organic revenue growth is expected to be between (5.0)% – (3.0)%.
- GAAP EPS estimate is revised to $5.65 – $5.95.
- Non-GAAP EPS estimate is revised to $9.90 – $10.20.
- The reduced guidance primarily reflects the lack of a recovery in demand from our small and mid-sized biotechnology clients in the second half of the year, as well as softer demand trends from global biopharmaceutical clients whose deterioration has become increasingly evident in the past couple of months.
Revenue & Expenses
Visualization of income flow from segment revenue to net income