Charles River Laboratories International Inc. (CRL),Tuesday said that its profit for the second quarter declined from last year, impacted primarily by lower sales volume, somewhat offset by cost saving actions implemented in both the first and second quarters of the year. Providing an update to its prior forecast, the company cut its full year 2009 forecast.
The company recorded second quarter net income of $34.2 million or $0.52 per share, compared to $49.1 million or $0.70 per share in the second quarter last year.
Excluding charges , net income was $43.1 million, a decline of 22.1%, compared to $55.4 million in the same period last year. Earnings per share were $0.66, down 16.5% from $0.79 in the year-ago period.
On average, 12 analysts polled by Thomson Reuters expected the company to report earnings of $0.58 per share for the quarter. Analysts' estimates typically exclude special items.
For the quarter, Charles River's net sales decreased 12.5% to $308.2 million from $352.1 million in the prior year quarter. Foreign currency translation reduced net sales by 5.1%. Analysts anticipated revenues of $308.05 million for the quarter.
James Foster, Chairman, President and Chief Executive Officer, said, " The cost-saving actions we implemented in the first quarter, augmented by additional actions in the second quarter, enabled us to achieve earnings per share higher than we previously expected."
The company to record a charge of $1.7 million or approximately $0.02 per share for the quarter, related to its cost-saving actions including headcount reductions and eliminations of incentives implemented.
In total, the first- and second-quarter actions are expected to result in cost savings of approximately $25.0 million in 2009, with an annual run-rate of approximately $30.0 million beginning in 2010.
As a result of cost-savings actions and lower operating expenses in Japan, 2009 second-quarter operating margin including charges, increased to 30.7% from 30.2% in the second quarter of 2008. Excluding charges, the operating margin was 31.9% compared to 30.9% for the second quarter of 2008.
For the six-month period, net income was $59.6 million, or $0.91 per share including charges, compared to $93.2 million or $1.32 per share in the similar period in 2008.
Excluding charges, net income for the first six months of 2009 was $81.3 million or $1.24 per share, compared to $106.2 million or $1.51 per share for the same period last year.
Net sales for the period decreased 11.6% to $609.7 million, from $689.8 million in the same period last year. Foreign exchange decreased net sales by 5.2%.
Looking ahead, Foster said, "Based on our first-half results and our expectation that clients will continue to spend carefully through the end of the year, we now expect 2009 sales to be 7-9% below last year. Despite the anticipated lower sales, we believe that continuing cost management will enable us to deliver non-GAAP earnings per share between $2.35 and $2.47."
The company now expects stable to slightly higher net sales for the second half of 2009 compared to the first half of the year. The sales guidance includes the negative impact of foreign exchange, which is now expected to reduce sales by approximately 3.0 to 3.5% compared to last year. Accordingly net sales growth would be a negative 7% - to negative 9%, compared to the prior guidance of a negative 2% - negative 7%. Including charges, earnings would be $1.78 - $1.90 per share, compared to prior guidance in the range of $1.86 - $2.16 per share. Non-GAAP earnings are estimated in the region of $2.35 - $2.47 per share, compared to earlier guidance of $2.30 - $2.60 per share.
CRL closed Tuesday's regular trading at $34.59, up $1.06 or 3.16% on a volume of 0.94 million shares on the NYSE.
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