Have you evaluated the performance of Charles River Laboratories' (CRL) international operations for the quarter ending September 2024? Given the extensive global presence of this medical research equipment and services provider, analyzing the patterns in international revenues is crucial for understanding its financial strength and potential for growth.
The global economy today is deeply interlinked, making a company's engagement with international markets a critical factor in determining its financial success and growth path. It has become essential for investors to comprehend how much a company relies on these foreign markets, as this understanding reveals the firm's potential for consistent earnings, its capacity to harness different economic cycles, and its overall growth prospects.
Being present in foreign markets serves as protection against local economic declines and helps benefit from more rapidly expanding economies. Yet, such expansion also introduces challenges related to currency fluctuations, geopolitical uncertainties and varied market behaviors.
While analyzing CRL's performance for the last quarter, we found some intriguing trends in revenues from its overseas segments that Wall Street analysts commonly model and monitor.
The recent quarter saw the company's total revenue reaching $1.01 billion, marking a decline of 1.6% from the prior-year quarter. Next, we'll examine the breakdown of CRL's revenue from abroad to comprehend the significance of its international presence.
A Dive into CRL's International Revenue Trends
Of the total revenue, $127.09 million came from Canada during the last fiscal quarter, accounting for 12.59%. This represented a surprise of +20.76% as analysts had expected the region to contribute $105.24 million to the total revenue. In comparison, the region contributed $125.24 million, or 12.21%, and $129.02 million, or 12.57%, to total revenue in the previous and year-ago quarters, respectively.
During the quarter, Europe contributed $267.12 million in revenue, making up 26.45% of the total revenue. When compared to the consensus estimate of $258.55 million, this meant a surprise of +3.32%. Looking back, Europe contributed $271.38 million, or 26.45%, in the previous quarter, and $264.79 million, or 25.79%, in the same quarter of the previous year.
Other International, including Brazil and Israel generated $11.27 million in revenues for the company in the last quarter, constituting 1.12% of the total. This represented a surprise of +381.45% compared to the $2.34 million projected by Wall Street analysts. Comparatively, in the previous quarter, Other International, including Brazil and Israel accounted for $7.68 million (0.75%), and in the year-ago quarter, it contributed $2.26 million (0.22%) to the total revenue.
Asia Pacific accounted for 4.46% of the company's total revenue during the quarter, translating to $45.01 million. Revenues from this region represented a surprise of -5.64%, with Wall Street analysts collectively expecting $47.7 million. When compared to the preceding quarter and the same quarter in the previous year, Asia Pacific contributed $50.39 million (4.91%) and $40.23 million (3.92%) to the total revenue, respectively.
International Market Revenue Projections
The current fiscal quarter's total revenue for Charles River, as projected by Wall Street analysts, is expected to reach $978.22 million, reflecting a decline of 3.5% from the same quarter last year. The breakdown of this revenue by foreign region is as follows: Canada is anticipated to contribute 11% or $107.66 million, Europe 26.8% or $262.46 million, Other International, including Brazil and Israel 0.4% or $4.24 million and Asia Pacific 5.4% or $53.07 million.
For the full year, the company is expected to generate $4 billion in total revenue, down 3% from the previous year. Revenues from Canada, Europe, Other International, including Brazil and Israel and Asia Pacific are expected to constitute 11.2% ($448.54 million), 26.7% ($1.07 billion), 0.8% ($31.02 million) and 4.9% ($196.93 million) of the total, respectively.
Key Takeaways
Charles River's reliance on international markets for revenues offers both opportunities and risks. Hence, keeping an eye on its international revenue trends could significantly help forecast the company's prospects.
In an era of growing international interdependencies and escalating geopolitical disputes, Wall Street analysts are vigilant in tracking these trends for businesses with a global reach, in order to refine their predictions of earnings. It should be noted, however, that a multitude of other elements, such as a company's domestic position, also play a significant role in shaping the earnings forecasts.
At Zacks, a company's changing earnings outlook is given considerable attention due to its proven, strong influence on a stock's price performance in the near term. The connection here is straightforward and positive: when earnings estimates are revised upward, the stock price generally follows suit, increasing as well.
Boasting a remarkable track record that's been externally verified, the Zacks Rank, our unique stock rating system, leverages changes in earnings projections to function as a reliable gauge for predicting short-term stock price movements.
Charles River currently has a Zacks Rank #3 (Hold), indicating that it could perform in line with the broader market in the near term. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>
Reviewing Charles River's Recent Stock Price Trends
Over the past month, the stock has seen an increase of 11.6% in its value, whereas the Zacks S&P 500 composite has posted an increase of 4.4%. The Zacks Medical sector, Charles River's industry group, has descended 1.4% over the identical span. In the past three months, there's been an increase of 6.7% in the company's stock price, against a rise of 13.1% in the S&P 500 index. The broader sector has declined by 2% during this interval.
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