CRL Stock Gains on Q2 Earnings and Revenue Beat, Raises '25 View

Core Insights - Charles River Laboratories International, Inc. (CRL) reported second-quarter 2025 adjusted earnings per share (EPS) of $3.12, an increase of 11.4% year over year, surpassing the Zacks Consensus Estimate by 24.8% [1][9] - The company's revenues reached $1.03 billion, exceeding the Zacks Consensus Estimate by 5%, and reflecting a 0.6% increase from the previous year [2][9] Revenue Performance - Revenues from the Research Models and Services (RMS) segment totaled $213.3 million, up 3.3% year over year, driven by higher sales in large research model products and services [4] - The Discovery and Safety Assessment (DSA) segment reported revenues of $618 million, down 1.5% year over year, attributed to lower sales volume in discovery and regulated safety assessment services [5] - Manufacturing Solutions generated revenues of $200.8 million, an increase of 4.4% year over year, primarily due to higher revenues in the Microbial Solutions business [6] Margin and Expense Analysis - Gross profit for the quarter was $357.1 million, a 0.9% increase from the prior year, with a gross margin of 34.6%, expanding by 12 basis points [7] - Selling, general, and administrative expenses rose by 12.8% year over year to $191.5 million, leading to an adjusted operating profit of $165.5 million, reflecting a 10% decline from the previous year [7] Liquidity Position - At the end of the second quarter, CRL had cash and cash equivalents of $182.8 million, down from $229.4 million at the end of the first quarter [8] - Cumulative net cash provided by operating activities was $376.3 million, compared to $323.4 million a year ago [8] Updated Guidance - For 2025, CRL expects total revenues to decline in the range of 2.56-0.5%, an improvement from the earlier guidance of 5.5-3.5% [10] - Adjusted EPS for 2025 is now projected to be between $9.90 and $10.30, up from the previous range of $9.30 to $9.80 [11] Overall Assessment - The company exited the second quarter of 2025 with strong earnings and revenue performance, indicating signs of biopharmaceutical demand stabilization [12] - Despite the contraction in operating margin, the updated financial guidance for 2025 is viewed positively [13]