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Charles River projects a modest 2013, slides on the Street

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Investors were none too pleased with Charles River Laboratories' ($CRL) outlook for 2013, as the CRO fell as much as 8% after projecting growth below analyst estimates.

Charles River is expecting revenue to increase between 2.5% and 4.5% next year, generating up to $2.90 per share. However, the consensus estimate was about $3.02 per share, RTTNews reports, and the CRO's shares dipped 8% to $35.65 after Wednesday's announcement, rallying a bit to close at $36.64 on Friday.

Charles River didn't give any concrete reasons for the low-figure projection, but its so-so 2012 results provide some clues. The company had a solid third quarter, increasing its net profit 18% to $22.4 million, but, on the whole, the first 9 months of the year were less impressive, as net income dropped about 11% and sales declined about 0.3% from 2011.

However, Charles River enters 2013 with some accretive deals. In November, the CRO announced its plans to spend $27 million on a majority stake of China's Vital River, a deal it expects to increase its 2013 sales about 1%. Same goes for Charles River's new deal with AstraZeneca ($AZN), a safety assessment and metabolism-and-pharmacokinetics testing deal the company predicts will add 1% to 2013's revenue line.

Deals like the one with AZ are largely the result of Charles River's focus on expanding its capabilities through M&A and internal development, CEO James Foster said, and he believes that more big-name partnerships are coming down the pike for 2013.

"The actions we have taken in the last three years to enhance our in vivo biology portfolio, improve our operating efficiency, and forge stronger relationships with our clients have positioned us exceptionally well to be the partner of choice for early-stage drug discovery and development products and services," Foster said in a statement.

- read Charles River's guidance
- check out the RTTNews story

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