Charles River Laboratories
Key takeaways
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Shares of Charles River Laboratories fell on Wednesday after the company said it expects to report a decline in sales for the full fiscal year, instead of growth.
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Second-quarter revenue met estimates, while profits came in slightly above estimates, but the company said demand was likely to moderate in the second half of the year.
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The board also approved a new $1 billion share buyback plan.
Shares of Charles River Laboratories (CRL) fell more than 12% in intraday trading Wednesday after the company said it expects to report a full-year sales decline, instead of growth.
The healthcare diagnostics and research company reported the second quarter income in line with analysts’ expectations of $1.03 billion, while profits came in just above estimates of $94.08 million. Both were down from a year ago, when the company reported revenue of $1.06 billion and net income of $97.02 million.
Expect lower demand in the second half of 2024
CEO James Foster said that while first half results were roughly in line with internal forecasts, trends suggest that demand will not improve in the second half as we had previously anticipated, and will actually decline for global biopharma customers.”
Expectations of weaker demand prompted Charles River to lower its guidance for the full fiscal year. The company said it now expects full-year revenue to fall 2.5% to 4.5%, compared with 1% to 4% growth previously. Earnings per share (EPS) forecasts were cut to $5.65 to $5.95 from $7.60 to $8.10.
The company’s board also approved a new billion dollars share buyback plan, which replaces a previous $1.3 billion plan that had been scrapped with about $129 million remaining.
Charles River shares were down 12.2% at $200.98 by 1:00 PM ET Wednesday following the news. With Wednesday’s decline, they have lost about 15% since the start of the year.
Read the original article at Investopedia.