* Q2 adj EPS $0.49 vs est $0.50
* Q2 revenue dips 5 pct to $292.1 mln
* Gives FY adj EPS below estimates
* Lowers FY rev outlook by 2-3 pct
* Shares fall as much as 6 pct
(Adds conference call details; updates stock movement)
Aug 2 Clinical research company Charles River
Laboratories International Inc (CRL.N) posted quarterly results
that missed market view, hurt by lower sales in its preclinical
services segment and higher costs, and lowered its full-year
Shares of the Wilmington, Massachusetts-based company fell
6 percent to a year-low of $29.15 in morning trade on the New
York Stock Exchange. They later pared some losses to trade at
"We now expect preclinical sales to be flat sequentially
for the remainder of the year, and have tempered our research
models and services outlook to reflect lower sales of research
models associated with preclinical studies," Chief Executive
James Foster said.
On a conference call, the company said a
longer-than-expected weakness in demand from its larger clients
resulted in the outlook cut.
Contract research organizations that focus on preclinical
and early-stage development are yet to see a recovery as
smaller firms, which are most active in early drug development,
stay cautious on spending. [ID:nSGE66M0HU]
For fiscal 2010, the company now sees adjusted earnings of
$1.90 to $2.00 per share, down from its previous forecast of
$2.20 to $2.40 per share.
The company, which cut its full-year revenue view by 2
percent to 3 percent, expects foreign currency translation to
reduce sales growth by about 1 percent, Chief Financial Officer
Tom Ackerman said.
Analysts on average expect full-year earnings, excluding
items, of $2.19 per share, on revenue of $1.24 billion,
according to Thomson Reuters I/B/E/S.
For the second quarter, the preclinical drug-testing
services firm posted a net income of $14.5 million, or 22 cents
a share, compared with $34.2 million, or 52 cents a share, a
Excluding items, it earned 49 cents a share.
Revenue fell 5 percent to $292.1 million. Sales of the
preclinical segment fell 12 percent to $125 million.
Analysts on average expected earnings of 50 cents a share,
excluding special items, on revenue of $305.6 million.
Operating margin decreased to 9.7 percent from 16.4 percent
due to lower sales of its genetically engineered rats -- used
in drug safety testing -- and higher costs.
The company said it incurred a loss of $8.4 million in the
second quarter, related to the termination of its proposed
takeover of Chinese rival Wuxi PharmaTech WX.N following
opposition from investors and proxy advisory firms.
The company will now buy back $500 million shares.
For the third quarter, the company expects to record an
additional $3 million to $4 million in charges, along with $30
million in breakup fee.
The company, which plans to suspend operations at its PCS
Massachusetts facility and transaction clients to other
facilities, as stated before, now expect to fully cease it
during the third quarter.
(Reporting by Swati Chitnis in Bangalore; Editing by Don
Sebastian) ((firstname.lastname@example.org; within U.S. +1
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