Core Insights - Charles River Laboratories International Inc. reported lower stock trading following the release of its second-quarter 2025 earnings, amid ongoing scrutiny regarding animal endangerment allegations [1][2]. Financial Performance - The company reported revenue of $1.03 billion, a marginal increase of 0.6% year-over-year, surpassing the consensus estimate of $984.65 million [5]. - The impact of foreign currency translation increased reported revenue by 1.2%, while organic revenue declined by 0.5% [5]. - Operating margin decreased to 9.7% from 14.8% in the second quarter of 2024, with net income at $52.3 million, or $1.06 per share, down from $90.0 million, or $1.74 per diluted share [5]. - Adjusted operating margin increased to 22.1% from 21.3%, with adjusted earnings at $3.12 per share, up 11.4%, exceeding the consensus estimate of $2.50 [5]. Segment Performance - Revenue for the Research Models and Services (RMS) segment was $213.3 million, an increase of 3.3% year-over-year, with organic revenue up by 2.3% [5]. - Discovery and Safety Assessment (DSA) segment revenue was $618 million, down 1.5%, with organic revenue decreasing by 2.4% due to lower sales volumes [5]. - Manufacturing Solutions revenue reached $200.8 million, up 4.4%, with organic revenue increasing by 2.9% [5]. Outlook and Market Conditions - The company raised its fiscal year 2025 adjusted earnings outlook from $9.30-$9.80 to $9.90-$10.30, compared to the consensus estimate of $9.60 [3]. - The company expects 2025 revenue to decline between (2.5)% and (0.5)%, a revision from the prior range of 5.5%-3.5% [3]. - The effects of government funding reductions have been minimal, and the company anticipates that the loss of commercial CDMO revenue will reduce the growth rate of manufacturing solutions by less than 500 basis points in 2025 [4]. Regulatory and Legal Context - The U.S. Fish and Wildlife Service cleared the company's shipments from late 2022 and early 2023 as legal, and investigations by the U.S. Department of Justice have been closed [2]. - The company faced allegations from PETA regarding misleading investors about its sales and purchases of long-tailed macaques, but recent legal developments have cleared the company of these allegations [1][2]. Market Reaction - Following the earnings report, CRL stock was down 4.82% at $159.42 [6].

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]