Charles River Labs posts 30 percent drop in 2nd-qtr profit; announces 2 acquisitions

Wednesday, August 5, 2009

Charles River Labs 2nd-qtr profit down 30 percent

WILMINGTON, Mass. — Medical research equipment maker Charles River Laboratories International Inc. on Tuesday posted a 30 percent drop in second-quarter profit as weak demand from pharmaceutical and biotech companies resulted in lower sales.

The company also announced two small acquisitions and a new partnership.

For the three months ended June 27, net income slipped to $34.2 million, or 52 cents per share, compared with $49.1 million, or 70 cents per share, for the second quarter of 2008.

Sales fell 13 percent to $308.2 million, from $352.1 million last year.

Foreign currency translation reduced net sales by 5 percent. Sales for its research models and services segment fell 4 percent to $165.7 million, while preclinical services sales slid 21 percent to $142.5 million.

Analysts surveyed by Thomson Reuters, on average, expected profit of 58 cents per share, on revenue of $308.1 million.

The company said it closed the acquisition of Cerebricon Ltd. for about $9 million cash. The Finnish company provides discovery services for therapeutic products for treatment of diseases of the central nervous system. It is expected to be neutral to earnings this year.

The company also said it will buy Systems Pathology Co. LLC, a software company developing automated digital imaging software tools. The company will make an initial payment of $24 million, with future payments based on the achievement of certain undisclosed milestones.

The Systems Pathology acquisition is expected to trim 2 cents per share from 2009 earnings, and should close by the end of the month.

In addition, Charles River said it has partnered with MPM Capital, a venture capital firm, in an innovative initiative targeted at advancing underfunded compounds with therapeutic promise.

In aftermarket trading, Charles River shares slipped 14 cents, after closing up $1.02, or 3 percent, at $34.55 in the regular session.

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