(Reuters) – Charles River Laboratories International beat Wall Street estimates for second-quarter profit and revenue on Wednesday, boosted by strong demand for its services that help clients discover new drug candidates and assess their safety.
Shares of the contract research firm were up nearly 3% at $212.10 before the bell.
The Wilmington, Massachusetts-based company also tightened its full-year profit forecast to the range of $10.30 to $10.90 per share, compared with $9.90 to $10.90 previously expected.
Analysts were expecting an annual profit of $10.37 per share, according to Refinitiv.
The company also projects the annual revenue growth to range between 2.5% and 4.5%, lifting the low-end from its prior forecast range of 2% to 4.5%.
This raise in the low-end of the forecast range comes in contrast to larger rivals in the drug discovery business, such as Thermo Fisher and Danaher, which flagged a weaker-than-expected demand for bioprocessing services this year and cut annual forecasts.
“We are also closely monitoring the near-term demand trends that show more cautious spending by biopharmaceutical clients,” Charles River CEO James Foster said, signaling concerns over a funding crunch in the sector.
The company’s revenue from the discovery and safety assessment segment rose 12.1%, while that from the research model and services unit increased 12.6% when compared with a year earlier.
Its total quarterly revenue was up 8.9% to $1.06 billion, topping estimates of $1.05 billion.
Strong sales helped the company offset the ongoing challenges linked to the supply of non-human primates (NHPs), the lab monkeys it imports to offer animal research services for drug developers and biotech companies.
In February, Charles River suspended the shipment of NHPs from Cambodia as the Department of Justice and U.S. Fish and Wildlife Service investigated the company over smuggling of wild long-tailed macaques to the United States.
Excluding items, the company earned $2.69 per share in the quarter ended July 1, beating analysts’ average estimate of $2.64 per share.
(Reporting by Vaibhav Sadhamta; Editing by Shweta Agarwal)
