Charles River’s Preclinical Growth Slows, Lowers Guidance
Wilmington, Mass.-based Charles River Laboratories saw slower than expected sales growth in its Preclinical Services Segment (PCS) during the third quarter, prompting the preclinical contract research organization (CRO) to reduce its 2008 profit and revenue-growth forecasts. Strong sales in Charles River’s Research Models and Services (RMS) segment helped offset the performance of PCS, but the company reduced the high-end of its full-year sales growth percentage forecast by 4%, from 14% to 10%.
“Our clients our continuing to invest in drug discovery development, but they are facing a range of unprecedented challenges,” Charles River chairman, president and CEO James Foster said in a company statement. “To address these challenges, our clients are restructuring their businesses, reprioritizing their drug development pipelines and shifting focus to drugs in late-stage development. These actions are leading to significant and accelerating study slippage and delays, pushing work from 2008 into 2009.”
Charles Rivers’ net sales for the third quarter increased 9% to $342.2 million from $314 million in the third quarter 2007. Net income for the third quarter was $44.7 million, compared with $42.8 million for the third quarter of 2007. In early morning trading Thursday, Charles River share prices fell 20% to $27.40.