Charles River raises 2026 forecast after Q3 profit beats estimates

Charles River Laboratories (CRL) raised its 2026 revenue and earnings forecasts on Nov. 4, after third-quarter non-GAAP earnings per share of $3.09 topped the $3.00 consensus estimate. Revenue of $982.73 million was above the $968.28 million estimate, the company said in a press release.

Here's how the company did:

• Non-GAAP EPS: $3.09 vs. $2.43 a year earlier, $3.00 consensus estimate
• GAAP EPS: $6.86 vs. $1.10 a year earlier
• Revenue: $982.73 million vs. $1.00 billion a year earlier, above the $968.28 million consensus estimate

Revenue fell 2.2% from a year earlier, mainly because of divestitures completed in May 2026. On an organic basis, which excludes acquisitions, divestitures and currency effects, revenue rose 4.7%.

The non-GAAP operating margin rose to 23.0% from 19.7% a year earlier, the company said. The gain was driven mainly by the benefit of the CDMO divestiture and higher sales volume for safety assessment services.

Guidance raised

The company raised its 2026 non-GAAP EPS forecast to $11.35 to $11.55 per share, from the $11.15 to $11.45 range it gave on Aug. 5. The midpoint rises by $0.15.

It also lifted its organic revenue growth forecast to at least 1.5%, from 0.0% to 1.0%. Reported revenue growth is now expected to be (2.0)% to (1.5)%, from (3.5)% to (2.5)%.

GAAP EPS guidance rose to $8.15 to $8.35 per share, from $3.05 to $3.35. The company said the GAAP increase reflects a $5.03 per share reversal of acquired tax reserves.

Birgit Girshick, Chief Executive Officer, said that third-quarter revenue and earnings per share “outperformed our prior expectations,” and that demand for biopharmaceutical testing remained strong.

Segment results

Discovery and Safety Assessment (DSA) revenue was $596.3 million, down 0.7% from $600.7 million a year earlier, after the sale of certain European Discovery Services sites. Organic revenue rose 5.9%, and the non-GAAP operating margin rose to 26.8% from 25.4%.

Manufacturing Solutions revenue was $178.9 million, down 6.2% from $190.7 million, primarily because of the CDMO divestiture. Organic revenue rose 7.4%.

Research Models and Services revenue was $207.5 million, down 2.8% from $213.5 million, mainly because of the Cell Solutions divestiture. Organic revenue fell 0.6%.

Costs and tax items

The GAAP operating margin was 20.6%, compared with 13.3% a year earlier. The company said the increase was driven mainly by a $44.6 million benefit in the DSA segment from the reversal of acquired non-income tax reserves.

GAAP net income for the quarter was $333.1 million, or $6.86 per diluted share, including a $245.6 million benefit, or $5.06 per share, tied to the same tax reserve reversal.

The company expects costs tied to restructuring and efficiency initiatives of about $1.50 per share in 2026, up from about $1.20 in its prior outlook.