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Charles River Labs quarterly profit beats estimates
July 31 |
July 31 (Reuters) - Contract medical researcher Charles River Laboratories International Inc reported a better-than-expected quarterly profit, following the lead of rival Covance Inc, as drug companies increasingly outsource research.
Net income from continuing operations was $28.6 million, or 58 cents per share, down from $30.5 million, 63 cents per share, a year earlier.
Excluding items, the company reported earnings of 73 cents per share, ahead of analysts' estimates of 71 cents per share.
Net sales rose about 3 percent to $292.9 million. Charles River said it was gaining market share and sales rose in both its preclinical services and research models businesses.
The company, which provides early-stage drug development services and animal specimens to pharmaceutical companies and research organizations, also reaffirmed its earnings and sales forecast for 2013.
Shares of Charles River rose 3 percent on Wednesday after rival Covance reported better-than-expected results and said that spending by biopharmaceutical companies on early-stage drug development was rising.
The contract research industry struggled following the economic downturn in 2008 and a wave of patent expiries, which prompted pharmaceutical companies to cut drug development.
However, research and development spending is expected to grow slowly in coming years and cost-conscious companies are increasingly outsourcing development to companies such as Covance, Charles River Laboratories and Quintiles.
Shares of Charles River closed at $45.54 on Wednesday on the New York Stock Exchange.
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