Charles River Labs posts gains for 2023 despite Q4 revenues falling nearly 8%

Charles River Labs' full year revenue rose 3.9%, jumping from $3.98 billion in 2022 to $4.13 billion in 2023. 

Net income for the early-stage CRO fell 2.4% to $474.6 million from the previous year, with non-GAAP income declining 3.8% to $548.9 million, according to company release.

Fourth-quarter revenues were $1.01 billion, a 7.9% decrease from the $1.1 billion recorded for the same period in 2022. On a non-GAAP basis, the CRO’s fourth-quarter net income was $127.2 million, a decrease of 16.8% from a year prior. The non-GAAP net income was primarily caused by lower revenue and operating income, including an increase in unallocated corporate expenses, as well as a higher tax rate, the company said in its earning release.

“Despite moderating demand trends in the broader life sciences sector, we were able to deliver solid revenue growth and non-GAAP earning per share that were in the upper half of our original guidance ranges,” James Foster, CRL’s president and CEO, said in the release. “We believe the current market environment is transitory. We are anticipating that some level of constrained client spending will persist in 2024, but that demand will stabilize over the course of the year.”

For 2024, the company expects a continued cautious approach by the biopharma industry with earnings per share likely to benefit from increased revenue and “modest operating margin improvement.” Additionally, CRL expects its November purchase of Noveprim, a Mauritius-based provider of nonhuman primates used in drug research, to contribute a minimum of 30 cents to non-GAAP earning per share for the year.

CRL’s guidance forecast between 1% to 4% revenue growth for 2024 with a GAAP earnings per share between $7.90 and $8.40 and non-GAAP earnings per share ranging from $10.90 to $11.40.