The second quarter at Charles River Laboratories International Inc. (NYSE:CRL) was by all accounts disappointing and things may only get worse.
The clinical research organization on Monday said net income during the three months ended June 30 was $14.5 million, down from a $34.2 million profit during the same quarter last year. Revenues also fell, sliding 5.2 percent to $292.1 million. Revenues in the company’s pre-clinical segment fell $17.5 million to $125 million, more than overwhelming a $2 million rise for the research models and services division.
“We are disappointed that market demand for outsourced preclinical services did not rebound during the second quarter as we had previously expected,” Charles River Labs president and CEO James Foster said in a prepared statement announcing the quarterly results. He also said the firm continues to talk with potential biopharmaceutical clients, who still expect to establish strategic partnerships and increase outsourcing activity.
“However, the timing of these decisions remains unclear and we do not believe that it is imminent,” he said.
Reflecting the ongoing slump, Charles River Labs scaled back its forecast for both revenues and earnings for the rest of 2010. The Wilmington, Mass.-based firm said it now expects sales for its pre-clinical segment will remain flat while the research models and service unit likely will experience a “moderate” dip over the next two quarters because of continued softness in toxicology revenues and normal seasonal declines.
The upcoming results also will take a hit after the company’s July 30 decision to scrap a proposed merger with WuXi PharmaTech Inc. and to pay a $30 million break up fee.
