Charles River Laboratories (CRL) announced a shortfall in shipments of monkeys used for research on Wednesday that weighed on its 2023 outlook, and CRL stock toppled.
The U.S. Department of Justice is currently investigating several shipments to Charles River from its Cambodian supplier of nonhuman primates, or NHPs. These are monkeys Charles River sells for medical research. In response, Charles River said it’s suspending NHP shipments from Cambodia at this time.
The suspended shipments will have a roughly $80 million to $160 million impact on Charles River’s sales this year, Evercore ISI analyst Elizabeth Anderson said. Charles River’s profit guidance also missed.
“Well, this is not the 2023 outlook we were looking for,” Anderson said in a note to clients. “Results in the quarter were broadly fine, but the focus of today’s report and call will be on the outlook.”
In premarket trading on today’s stock market, CRL stock tumbled 11.4% near 215.90.
CRL Stock: Earnings Guide Widely Lags
During the fourth quarter, Charles River earned $2.98 per share, minus some items. Earnings advanced almost 20% and beat expectations for $2.75 a share, according to FactSet.
Sales also rose 21.5% to $1.1 billion, ahead of estimates for $1.04 billion. Charles River noted sales grew with the help of an additional week in the fourth quarter and the acquisition of Explora BioLabs. However, divestitures and foreign currency also weighed on growth.
For the year, the medical supplier expects sales to grow 1.5% to 4.5% on a strict, as-reported basis. CRL stock analysts called for $4.12 billion in sales, which equals a 3.6% rise. Charles River expects organic sales growth of 4.5% to 7.5% in 2023.
Further, the company expects full-year adjusted earnings to come in at $9.70 to $10.90 per share, well below forecasts for $11.37.
Follow Allison Gatlin on Twitter at @IBD_AGatlin.
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The post Charles River Dives As Monkey Investigation Hamstrings 2023 Outlook appeared first on Investor’s Business Daily.
