Preclinical specialist Charles River Labs ($CRL) posted solid revenue growth despite a tough market for early-phase services, but a spike in charges pulled down net income on an otherwise strong second quarter.
The CRO's net sales came in at $292.9 million on the quarter, 2.9% better than the same period last year. However, a 5.1% jump in the cost of sales left Charles River with $27.7 million in net income, a 9.1% drop.
But Charles River's sales still shined amid bearish demand. The CRO's research models and services segment grew 3.1% to $179 million on the quarter thanks largely to the combined $44 million it spent on Vital River and Accugenix over the past year. Meanwhile, the company's preclinical services division jumped 2.6% to $114 million, a gain Charles River attributes to an increase in dealmaking with large biopharma clients.
The CRO is sticking to its full-year revenue guidance, expecting 3% to 5% growth that would make for $1.2 billion on the high end. Charles River's focus on early research has made it stand out in the outsourcing world, CEO James Foster said, and the company's investments over the past year are paying off with new deals.
"Our value proposition is resonating with biopharmaceutical companies and academic institutions, who are increasingly choosing to partner with Charles River as evidenced by the market share gains we achieved in 2012 through strategic client relationships," Foster said in a statement.
- read Charles River's results