The latest set of numbers from Boston-based Charles River Laboratories ($CRL) is getting a thumbs-up from analysts happy to see signs of stability on the business front. The preclinical study experts racked up earnings of 69 cents a share, minus one-time items, beating the average on the street. And given some of the hard times seen in its sector in recent years, that performance was judged as a hopeful sign of better times ahead.
"Charles River is showing that it's doing a very good job of managing its business within the constraint of a difficult industry environment," Leerink Swann analyst John Sullivan told Bloomberg. "Charles River is managing its business to maximize its cash flow while continuing to make the investments that should facilitate growth when growth is available."
Charles River has been seen as something of a bellwether in the CRO industry as it's navigated a troubled market in the last few years. RW Baird's Eric Coldwell has been keeping a close eye on its work volume, anxious to see an increase in demand as big clients start to move more projects ahead, according to a report in Outsourcing-Pharma. And Jefferies' David Windley is tracking the company's progress on strategic deals, a key to a turnaround.
"We believe that our fourth-quarter results demonstrate a modestly improving environment on a number of levels: stable large biopharma demand, increasing demand for non-regulated services, better funding for mid-tier biopharma companies, and consistent growth in the academic and government sector," says CEO James Foster. "The fourth-quarter results and our expectation for relative stability in our end markets confirm our outlook for 2012. Therefore, we are reaffirming our sales and earnings per share guidance for the year."
Charles River shares surged a bit on the fourth-quarter numbers report.