Charles River Swings to Loss

The company takes an asset-sale hit in the first-quarter and now expects a full-year loss as well.
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Charles River Laboratories International

(CRL) - Get Report

said late Tuesday it swung to a loss in the first quarter, on charges of $129.2 million, or $1.81 a share, related to the sale of a business unit.

The Wilmington, Mass.-based company lost $100.1 million, or $1.40 a share, in the quarter, compared with the earnings of $27.6 million, or 40 cents a share, a year ago. Adjusted for items, earnings were $36.4 million, or 50 cents a share, in the most recent quarter. Analysts polled by Thomson First Call were expecting earnings of $42.5 million, or 57 cents a share.

First-quarter revenue rose 3.7% from a year ago to $283.8 million vs. analysts' expectation of $293.1 million.

The company expects a loss of 9 cents to 15 cents a share in the full year, on growth in sales from continuing operations of 6% to 8% on sales of $990 million in 2005. Earlier, the company had forecast earnings of $1.95 to $2.01 a share in the full year, on growth in sales from continuing operations of 7% to 9%. Adjusted earnings are expected to be $2.12 a share to $2.18 a share in the year compared with the earlier guidance of $2.34 a share to $2.40 a share.

The company agreed to sell its clinical services business for $215 million in cash to

Kendle International

(KNDL)

as part of a portfolio realignment to focus on its core drug discovery and development business. The sale is expected to close in the third quarter subject to regulatory approval.

The company also said that it's closing its international and surgical services facility in Massachusetts and noted that its board approved increasing the company's share buyback program to up to $300 million.

By segment, first-quarter revenue from research models and services segment rose marginally 0.9% from a year ago to $129 million. Revenue from preclinical services segment increased 7.4% to $122.5 million and revenue from clinical services segment was up 1.9% to $32.3 million.

Charles River shares were trading down $8.23, or 17.6%, at $38.67 late-morning Wednesday.

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