Charles River Laboratories Earnings Preview

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Investors braced for a bumpy ride ahead of Charles River Laboratories' (NYS: CRL) earnings announcement as the company has wavered between beating and falling short of analyst predictions during the past fiscal year. The company will unveil its latest earnings Tuesday. Charles River Laboratories International is a global provider of solutions that accelerate the drug discovery and development process, including research models and associated services, and outsourced preclinical services.

What analysts say:

  • Buy, sell, or hold?: Analysts think investors should stand pat on Charles River Laboratories with 10 of 13 analysts rating it hold. Analysts don't like Charles River Laboratories as much as competitor PAREXEL International overall. Five out of nine analysts rate PAREXEL International a buy compared to two of 13 for Charles River Laboratories. Analysts still rate the stock a hold, but they are a bit more wary about it compared to three months ago.
  • Revenue forecasts: On average, analysts predict $287.8 million in revenue this quarter. That would represent a decline of 1.5% from the year-ago quarter.
  • Wall Street earnings expectations: The average analyst estimate is earnings of $0.60 per share. Estimates range from $0.56 to $0.67.

What our community says:
CAPS All-Stars are solidly backing the stock with 96.6% awarding it an "outperform" rating. The community at large concurs with the All-Stars with 95.7% granting it a rating of "outperform." Fools are keen on Charles River Laboratories, though the message boards have been quiet lately with only 58 posts in the past 30 days. Even with a robust four out of five stars, Charles River Laboratories' CAPS rating falls a little short of the community's upbeat outlook.

Management:
Revenue has fallen for the past three quarters.

Now let's look at how efficient management is at running the business. Traditionally, margins represent the efficiency with which companies capture portions of sales dollars. The following table shows gross, operating, and net margins over the past four quarters.

Quarter

Q1

Q4

Q3

Q2

Gross Margin

35.9%

34.9%

32.9%

34.4%

Operating Margin

14.8%

(134.9%)

1.9%

9.7%

Net Margin

11.0%

(128.3%)

(9.0%)

4.9%

One final thing: If you want to keep tabs on Charles River Laboratories movements, and for more analysis on the company, make sure you add it to your watchlist.

The Motley Fool owns shares of Charles River Laboratories International.Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

At the time this article was published

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