Yahoo Finance Charles River beats profit estimates on strength in drug discovery services
May 11 (Reuters) - Charles River Laboratories International Inc beat Wall Street estimates for first-quarter profit on Thursday, due to strong demand for its services that help clients discover new drug candidates and assess their safety.
The contract research company reported revenue of $662.4 million in its discovery and safety assessment (DSA) segment, higher than analysts' average estimate of $610.9 million, according to Refinitiv data.
Total revenue rose 12.6% from a year earlier to $1.03 billion, beating expectations of $986.3 million.
Wilmington, Massachusetts-based Charles River said it believes its biotech clients have the funds required to take the development of their drug candidates forward, pointing to the robust demand for its DSA unit services.
However, peers Danaher Corp and Thermo Fisher Scientific had flagged softer demand from biotech companies for tools and compounds used to make therapeutics and vaccines as the industry grapples with funding crisis.
Financial downturn last year has limited the ability of several biotechs to raise capital, forcing them to cut their spending on research and development, while the collapse of three U.S. regional banks has further exacerbated the situation in last two months.
Sales from the DSA segment had helped Charles River offset the impact from challenges related to the supply of non-human primates (NHP) and lower revenue in its manufacturing segment led by the divestment of Avian Vaccine business.
In February, the company suspended the shipment of NHPs from Cambodia as it is under investigation by the Department of Justice and U.S. Fish and Wildlife Service on import practices of non-human primates into United States.
On an adjusted basis, the company earned $2.78 per share in the quarter ended April 1, beating analysts' estimates of $2.59 per share.
It raised the low end of its full-year adjusted profit forecast. The company now sees the profit in range of $9.90 to $10.90 per share, compared with previous forecast of $9.70 to $10.90 per share.
Analysts were expecting annual profit of $10.24 per share, according to Refinitiv. (Reporting by Khushi Mandowara and Vaibhav Sadhamta in Bengaluru; Editing by Shweta Agarwal)
