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Charles River (CRAI) Declines 11.4% Post Q4 Earnings Miss

CRA International, Inc., which conducts business as Charles River Associates CRAI, reported lower-than-expected fourth-quarter fiscal 2022 results. The company also revealed a below par revenue guidance for 2023.

The below par results and the tepid guidance naturally disappointed investors. Consequently, the stock plummeted 11.4% since the earnings release on Mar 2.

What did the Q4 Earnings Report Unveil

Non-GAAP EPS came in at $1.19, missing the Zacks Consensus Estimate by 15%. However, the quarterly earnings increased 4.4% from the year-ago fiscal quarter’s reported number. Revenues of $145 million also missed the Zacks Consensus Estimate by 2.4% but increased 7.6% from the year-ago fiscal quarter’s reported figure.

Charles River delivered 74% utilization, while headcount was up by 9.1% from the year-earlier fiscal quarter’s reported number. Non-GAAP EBITDA decreased 4% from the prior-year fiscal quarter’s reading to $14.6 million. Non-GAAP EBITDA margin plunged 120 basis points from the year-ago fiscal quarter’s reported number to 10.1%.

CRAI exited the quarter with $31.4 million cash compared with $24.1 million witnessed at the end of the prior fiscal quarter. Charles River used cash worth $60.14 million in operating activities, while capex was $8.1 billion. In the quarter, CRAI paid out $2.72 million of dividends.

Charles River Associates Price, Consensus and EPS Surprise

Charles River Associates Price, Consensus and EPS Surprise
Charles River Associates Price, Consensus and EPS Surprise

Charles River Associates price-consensus-eps-surprise-chart | Charles River Associates Quote

Moreover, CRAI’s board of directors expanded the company’s existing share repurchase program, under which $22.9 million currently remains, by $20 million.

2023 Guidance

For 2023, on a constant currency basis relative to fiscal 2022, Charles River expects its revenues between $615 million and $640 million. The midpoint of the guided range ($627.5 million) is however pegged below the Zacks Consensus Estimate of $630.29 million.

CRAI expects non-GAAP EBITDA margin to be in the range of 10.8-11.5%. Currently, Charles River carries a Zacks Rank #4 (Sell). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Recent Releases

The following stocks from the Business Service sector reported better-than-expected fourth-quarter results.

Gartner, Inc. IT, currently carrying a Zacks Rank #3 (Hold), reported better-than-expected fourth-quarter 2022 results, wherein both earnings and revenues surpassed the respective Zacks Consensus Estimate. Adjusted earnings (excluding 49 cents from non-recurring items) per share of $3.70 beat the Zacks Consensus Estimate by 44% and increased 23.8% year over year. IT’s revenues of $1.5 billion beat the Zacks Consensus Estimate by 2.6% and improved 15.2% year over year on a reported basis and 20% on a foreign-currency-neutral basis.

Aptiv PLC APTV, currently carrying a Zacks Rank of 3, reported better-than-expected fourth-quarter 2022 results. Adjusted earnings (excluding 41 cents from non-recurring items) of $1.27 per share beat the Zacks Consensus Estimate by 6.7% and increased more than 100% on a year-over-year basis. APTV’s revenues surpassed the Zacks Consensus Estimate by 6% and increased 12.2% year over year.

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