Charles River-CRL Stock Up on Q4 Earnings and Revenue Beat, Margins Fall

Core Insights - Charles River Laboratories International, Inc. (CRL) reported fourth-quarter 2024 adjusted earnings per share (EPS) of $2.66, an increase of 8.1% year over year, exceeding the Zacks Consensus Estimate by 6.4% [1][2] - The company experienced a GAAP loss of$ 4.22 per share compared to earnings of $3.62 per share in the same quarter last year [2] - Full-year 2024 EPS was$ 10.32, down 3.3% from the previous year but still surpassing the Zacks Consensus Estimate by 1.6% [2] Revenue Performance - Total revenues for the fourth quarter reached $1.00 billion, beating the Zacks Consensus Estimate by 2.7%, but reflecting a decline of 1.1% from the prior year [3] - Full-year 2024 revenues amounted to$ 4.05 billion, a decrease of 1.9% year over year, yet exceeding the Zacks Consensus Estimate by 0.7% [3] Segment Analysis - Research Models and Services (RMS) revenues in Q4 were $204.3 million, up 4.3% year over year, although down 0.4% organically [5] - Discovery and Safety Assessment (DSA) revenues totaled$ 603.3 million, down 3.6% year over year and 3.5% organically [6] - Manufacturing Solutions revenues reached $194.9 million, an increase of 1.6% year over year and 2.1% organically [7] Margin and Cost Analysis - Gross profit for the quarter was$ 284.2 million, a decline of 21.9% from the previous year, with a gross margin of 28.4%, down 757 basis points [8] - Adjusted operating income was $88.5 million, reflecting a 47% decline year over year, with an adjusted operating margin of 8.8%, down 764 basis points [8] Liquidity and Cash Position - At the end of 2024, the company had cash and cash equivalents of$ 194.6 million, down from $276.8 million at the end of 2023 [9] - Cumulative net cash provided by operating activities was$ 734.6 million, compared to $683.9 million a year ago [10] Future Guidance - For 2025, CRL expects total revenues to decline by 4.5-7.0% on a reported basis, with a Zacks Consensus Estimate of$ 3.89 billion, indicating a reported decline of 3.4% [11] - Adjusted EPS for 2025 is projected to be in the range of $9.10-$ 9.60, with the Zacks Consensus Estimate at $9.93 [11] Overall Assessment - The company reported better-than-expected results in Q4 2024, with both earnings and revenues surpassing estimates, despite a year-over-year decline in total revenues [12] - While RMS and Manufacturing Solutions segments showed growth, the DSA segment faced significant declines due to lower sales volume [13] - The company is focusing on innovation and enhancing its portfolio to adapt to changing industry demands [14]