What happened
Shares of Charles River Laboratories International (CRL -0.98%) are jumping today, up by 8.2% as of 11:43 a.m. ET. The solid gain came after the company announced its third-quarter results before the market opened.
Charles River reported Q3 revenue of $989.2 million, up 10.4% year over year. This figure easily topped the consensus Wall Street revenue estimate of $970.4 million.
The company posted Q3 earnings of $96.5 million, or $1.88 per share, based on generally accepted accounting principles (GAAP). On a non-GAAP basis, Charles River recorded earnings of $134.7 million, or $2.63 per share. While this reflected a decline from the prior-year period, it handily beat the average analyst's adjusted earnings estimate of $2.49 per share.
In addition, Charles River provided updated full-year 2022 guidance. The company now forecasts full-year revenue growth of between 10% and 11%. It previously projected revenue growth between 9% and 11%. Non-GAAP earnings per share are expected to come in between $10.80 and $10.95. The previous guidance was for non-GAAP EPS between $10.70 and $10.95.
So what
Charles River's results would have been even better without currency headwinds. The company stated that the impact of foreign currency exchange lowered its reported revenue growth by 4.5%.
Investors shrugged off the earnings decline in Q3. The lower GAAP and non-GAAP net income resulted primarily from lower operating margin, higher interest expense, and a higher tax rate.
The company saw an especially strong performance from its discovery and safety assessment (DSA) business segment. The unit generated Q3 revenue of $619.5 million, up 16.5% year over year.
Now what
Charles River CEO James Foster said in the Q3 press release that the company believes that it's "an excellent barometer of the sustained health of the biopharmaceutical industry." Its latest quarterly performance could bode well for pharma stocks in general heading into 2023.
