US-based contract research organisation (CRO) Charles River Laboratories continued last year’s solid pattern of growth in the first quarter of 2008, with both net sales and operating income rising 16% year on year.

“The year is off to a very strong start,” said chairman, president and chief executive officer James Foster as Charles River reaffirmed its previous financial guidance for the whole of 2008.

Strong performances from both the Research Models and Services (RMS) and the Preclinical Services (PCS) segments drove net sales for the first quarter up by 16.0% to US$337.7 million, with currency translation contributing 4.2% of the increase.

Operating income was US$63.5 million, 16.1% higher than in the first quarter of 2007, and net income rose by 21.3% to US$45.1 million. Net income for the first quarter of 2007 included a loss of US$464,000 from discontinued operations. Charles River reported earnings per diluted share (EPS) of US$0.64 for the latest quarter, compared with EPS of US$0.54 in Q1 2007.

Sales in the RMS segment jumped 17.8% to US$168.6 million. According to Charles River, the sales growth was broad-based, riding on strong global demand for research models and services, as well as for Endotoxin and Microbial Detection (formerly In Vitro) products. Operating income was up 18.7% to US$55.8 million and the RMS operating margin improved from 32.9% to 33.1%, primarily due to higher sales.

First-quarter sales in the PCS segment were 14.1% ahead at US$169.1 million, mainly reflecting continued strong demand for general and speciality toxicology services. Operating income slipped 0.7% to US$23.3 million, though, and the operating margin narrowed to 13.8% from 15.8% in the first quarter of 2007. Charles River said the lower margin was expected, given the extra costs of transferring to a new preclinical facility in Nevada, US and the negative impact of foreign exchange in Canada.

“We are continuing to see robust demand from pharmaceutical and biotechnology customers for the essential products and services that we provide, as they endeavour to discover new therapies and increasingly adopt strategic outsourcing as a more efficient and cost-effective means of drug development,” Foster commented. “As a result of our aggressive investment to expand and strengthen our infrastructure, we are extremely well-positioned to meet our clients’ needs,” he added.

Originally issued last December, Charles River’s guidance for the whole of 2008 is that net sales growth will be in the range of 10%-13%, generating EPS of US$2.59 to US$2.69.