CRL Q2 Earnings and Revenues Top, '26 View Up, Stock Up in Pre-Market

Charles River Laboratories International, Inc. CRL reported second-quarter 2026 company-defined non-GAAP earnings of $3.02 per share, down 3.2% year over year. The reported earnings topped the Zacks Consensus Estimate by 17.6%.

GAAP net loss was 3 cents per share compared to GAAP earnings of $1.06 per share in the year-ago period.

Revenues of $1.00 billion declined 2.7% (up 0.1% organically) year over year but beat the Zacks Consensus Estimate by 3%. 

Following the announcement, CRL shares rose 7.9% in the pre-market trading today.

Charles River's DSA Business Shows Demand Gains

DSA revenues totaled $606.5 million, down 1.9% year over year on a reported basis. Organic revenues increased 0.2%, driven mainly by higher study volume for regulated safety assessment services.

The segment's GAAP operating margin rose 60 basis points to 20.5%, aided by lower intangible-asset amortization and reduced third-party legal costs tied to a non-human primate supply matter. The non-GAAP margin fell 180 basis points to 25.6% because of higher study-related direct costs.

CRL's RMS Sales Decline on North America Weakness

RMS revenues totaled $209.5 million, down 1.8% from the year-ago quarter’s level. Organic revenues declined 1.4% primarily due to lower sales of small research models in North America and weaker research model services, partly offset by growth in China.

The segment's GAAP operating margin improved 50 basis points to 17.3%, mainly because of lower amortization following the Cell Solutions divestiture. The non-GAAP margin contracted 80 basis points to 24.5% on lower volume and an unfavorable geographic revenue mix.

Charles River's Manufacturing Margins Expand

Manufacturing revenues amounted to $188.1 million, down 6.3% year over year, mainly because of the CDMO divestiture. Organic revenues rose 1.3%, supported by higher revenues in the Microbial Solutions business.

GAAP operating margin surged to 34.9% from 6.0% a year earlier. The non-GAAP margin expanded 500 basis points to 37.8%, with the CDMO business and the benefit from its divestiture driving the improvement.

CRL's Margin Performance

The gross profit in the reported quarter was $363.4 million, up 1.8% from the prior-year quarter’s level. The gross margin of 36.2% expanded approximately 159 basis points (bps) year over year.

Selling, general & administrative expenses increased 19.5% year over year to $228.9 million. Operating profit totaled $119.9 million, up 19.7% from the prior-year quarter’s level. The operating margin expanded approximately 224 bps to 11.9%.

Charles River Laboratories International, Inc. Price, Consensus and EPS Surprise

Charles River Laboratories International, Inc. price-consensus-eps-surprise-chart | Charles River Laboratories International, Inc. Quote

CRL's Cash Flow and Buyback Activity

Cash and cash equivalents amounted to $192.0 million as of June 27, 2026, compared with $191.8 million at the end of the first quarter. Cumulative net cash provided by operating activities at the end of the quarter was $220.8 million compared with $376.3 million a year ago.

CRL repurchased 0.6 million shares for $100 million during the second quarter at an average price of $174 per share. Year-to-date repurchases totaled $300 million, leaving $700 million available under the company's authorization.

Charles River Raises Its 2026 Outlook

Charles River now expects reported revenues to decline 3.5% to 2.5% in 2026, compared with its prior projection for a 5.5% to 4.0% decrease. The Zacks Consensus Estimate for 2026 revenues implies a decline of 4.2% year over year. 

The company raised its non-GAAP earnings guidance to $11.15-$11.45 per share from $10.80-$11.30.  The Zacks Consensus Estimate for the metric is pegged at $11.05 per share.

Our Take on CRL

Charles River exited the second quarter of 2026 with earnings and revenues beating estimates. Reported revenue decline reflected the effects of completed divestitures. Organic growth increased due to gains in DSA and Manufacturing offset weakness in RMS. However, the expansion of both margins in the quarter looks encouraging.

On a positive note, Charles River raised its 2026 financial outlook driven by improving demand trends in the DSA segment and better-than-expected performance in the Manufacturing segment.

CRL’s Zacks Rank and Other Key Picks

Charles River currently carries a Zacks Rank #2 (Buy).

Some other top-ranked stocks from the broader medical space are Intuitive Surgical ISRG, Quest Diagnostics DGX and Medpace MEDP.

Intuitive Surgical, carrying a Zacks Rank #2 at present, reported second-quarter 2026 adjusted EPS of $2.80, which surpassed the Zacks Consensus Estimate by 12.9%. Revenues of $2.89 billion beat the Zacks Consensus Estimate by 3.1%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

ISRG has an earnings yield of 3.1% compared to the industry’s negative 3% yield. The company beat earnings estimates in each of the trailing four quarters, the average surprise being 16.53%.

Quest Diagnostics, carrying a Zacks Rank #2 at present, posted second-quarter 2026 adjusted EPS of $3.12, exceeding the Zacks Consensus Estimate by 11%. Revenues of $3.04 billion topped the Zacks Consensus Estimate by 2.1%.

DGX has an earnings yield of 4.7%, almost in line with the industry’s yield. The company’s earnings outpaced estimates in each of the trailing four quarters, the average surprise being 5.77%.

Medpace, carrying a Zacks Rank #2 at present, posted second-quarter 2026 adjusted EPS of $4.25, exceeding the Zacks Consensus Estimate by 4.17%. Revenues of $707.3 million outperformed the consensus mark by 1.12%.

MEDP has a historical five-year earnings growth rate of 30.5% compared with the industry’s 5.6% growth. In the trailing four quarters, the company delivered an average earnings beat of 10.16%.

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