Highlights

  • Second quarter revenue fell 2.7% to $1,004.1 million, while GAAP operating income rose 19.7% to $119.9 million.
  • GAAP net loss was $1.5 million, or $0.03 per diluted share, including a $63.7 million divestiture loss.
  • Charles River sold its CDMO, Cell Solutions and European Discovery businesses in May and bought a primate supplier in January.
  • Discovery and Safety Assessment backlog stood at $2.0 billion, and $700.0 million remained under its repurchase authorization.

Charles River Laboratories International (NYSE:CRL) shares were trading near their 52-week high at USD 340.76 on October 21, 2026, up 8.02%. The drug development services group bought a Cambodian primate supplier in January, sold three businesses in May, and filed its second quarter report on August 5.

Based in Wilmington, Massachusetts, Charles River is a Delaware corporation that describes itself as a full service, non-clinical global drug development partner with more than 75 years in the business. It reports three segments: Research Models and Services, covering research models, colony management and diagnostic services; Discovery and Safety Assessment, which provides in vitro, in vivo and in silico studies and bioanalytical support; and Manufacturing, which includes Microbial Solutions and Biologics Solutions testing. Its fiscal year is typically 52 weeks.

A Smaller Revenue Base and a Net Loss in the Second Quarter

Revenue for the quarter ended June 27, 2026 was $1,004.1 million, down from $1,032.1 million a year earlier. The company tied the decline mainly to the sale of its CDMO business and the European Discovery divestiture, with lower cell supply revenue a smaller factor. Service revenue fell 3.9% to $808.3 million, while product revenue rose 2.3% to $195.8 million.

GAAP operating income improved to $119.9 million, an 11.9% margin, from $100.1 million, or 9.7%. Manufacturing operating income reached $65.6 million against $12.1 million, as amortization fell from $46.3 million to $2.1 million. Discovery and Safety Assessment revenue slipped 1.9% to $606.5 million, with operating income up 1.3% to $124.4 million.

Below the operating line, the picture was weaker. A $63.7 million loss on the CDMO and Cell Solutions sale drove other expense, net to $37.4 million, and the tax provision of $53.9 million on $53.2 million of pretax income meant an effective rate of 101.4%. The result was a GAAP net loss attributable to common shareholders of $1.5 million, compared with net income of $52.3 million a year earlier. For six months, the net loss was $16.3 million, or $0.34 per diluted share, and operating cash flow was $220.8 million versus $376.3 million.

Portfolio Moves, Debt and Share Repurchases

On May 6, the company sold its CDMO and Cell Solutions businesses to GI Partners for net cash paid to the buyer of $12.4 million. It may fund up to $45.0 million of future losses and capital spending of the divested businesses and may receive up to $50.0 million of contingent payments. On May 22 it sold certain European Discovery Services businesses to IQVIA for a preliminary $125.2 million in cash, with up to $10.0 million of contingent payments.

The January purchase of the Cambodian primate supplier carried a preliminary price of $507.3 million, of which $105.0 million of deferred consideration remained unpaid at quarter end. PathoQuest cost $67.6 million for the additional 79% stake.

Total debt and finance leases were $2,637.4 million, up from $2,152.2 million at December 27, 2025, including $1,120.3 million drawn on a $2.0 billion revolving facility maturing in December 2029. Cash and equivalents were $192.0 million. Under its $1.0 billion repurchase program, the company bought 1.7 million shares for $300.0 million in six months.

The filing describes a putative securities class action over its primate importation disclosures. A federal appeals court reversed part of the dismissal in August 2025, and the case returned to the district court. The company calls the claims without merit and cannot estimate potential loss.

Cost Savings and Backlog Context

The 10-Q does not give numerical financial guidance. It says cost savings and restructuring actions are expected to produce about $300 million of cumulative annualized savings by the end of 2026, of which more than $175 million benefited fiscal 2025. Management describes client spending as cautious but improving, mainly in the Discovery and Safety Assessment segment, where backlog rose slightly to $2.0 billion from $1.9 billion at December 27, 2025. These are company statements from a report filed August 5, 2026.