Charles River buys German firm, raises outlook

Charles River Laboratories International Inc. raised its full-year profit outlook late Tuesday, as demand for drug development services remains strong.

Charles River, which does contracted clinical research for pharmaceutical companies, now expects 2008 profit between $2.94 and $3 per share, excluding charges, up from prior guidance of $2.87 to $2.97 per share. Analysts polled by Thomson Financial expect profit of $2.97 per share.

Revenue is now expected to rise by 12 percent to 14 percent, up from a prior range of 10 percent to 13 percent. The guidance implies a range of $1.38 billion to $1.4 billion. Analysts expect revenue of $1.38 billion.

Separately, Charles River said it is buying privately held NewLab BioQuality AG for $53 million in a move that will help expand the company's clinical service offerings. Germany-based NewLab's 2008 revenue is expected to range from $20 million to $23 million.

The cash buyout is expected to close during the third quarter and will be neutral to earnings per share in 2008.

Shares fell $2.27, or 3.4 percent, to $64.36 in midday trading Wednesday as investors expressed disappointment over weaker-than-expected preclinical service revenue during the second-quarter. Still, the company topped profit and overall revenue expectations. (AP)