Charles River predicts strong 2013 despite Q4 slump
Charles River Labs ($CRL) had a rough go in sales in the fourth quarter, but the company says rising demand and better exchange rates will make for 2013 revenue growth between 4% and 6%, an increase over its previous estimates.
Last quarter, net sales fell 3.7% to $280.1 million, and net income fell about 16% to $22.7 million, but CEO James Foster said Charles River has expanded its market share through acquisitions and internal development, and the CRO is counting on an uptick in biopharma partnerships this year.
"Our fourth-quarter operating results were in line with our expectations, concluding a year in which we made significant progress on our goal to position ourselves as the partner of choice for early-stage drug research and development support," Foster said in a statement. "We have differentiated ourselves from the competition through our unique focus on early research, building a portfolio of essential products and services which enable our clients to outsource a broad portion of their research and development activities."
In the fourth quarter, Charles River's preclinical services unit stayed mostly flat at $108.3 million in sales, but the CRO's larger research models and services business continued its struggles, declining 5.8% to $171.8 million.
That's not enough to dull Charles River's optimism about 2013, though, and the new projections outstrip October's growth prediction of between 2.5% and 4.5%.
The CRO is counting on its late-year M&A and dealmaking to make its mark on revenue this year, particularly the $27 million it paid for a majority stake of China's Vital River--a deal it expects to increase its 2013 sales about 1%--and its new partnership with AstraZeneca ($AZN), a safety assessment and metabolism-and-pharmacokinetics testing agreement the company predicts will add another 1% to the year's revenue.
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