NEW YORK – Laboratory Corporation of America on Thursday reported 4 percent year-over-year revenue growth for the third quarter.
Total revenues for the three months ended Sept. 30 were $4.06 billion, up from $3.90 billion in the third quarter of 2020, and above the consensus Wall Street estimate of $3.65 billion.
Growth was driven by a recovery in baseline testing, which offset a decline in SARS-CoV-2 testing. Organic revenues grew 3 percent with acquisitions and favorable foreign currency translation each contributing less than 1 percent.
In diagnostics, revenues were down 3 percent to $2.62 billion compared to $2.70 billion in Q3 2020. Organic revenues were down 4 percent, with SARS-CoV-2 testing down 10 percent and the company's base testing business up 6 percent, the Burlington, North Carolina-based firm said.
Total requisition volume grew a fraction of a percent as organic volume declined by less than 1 percent with SARS-CoV-2 testing volumes down 6 percent and base testing volumes up 6 percent.
The company's Covance drug development unit saw revenues grow 18 percent year over year to $1.46 billion from $1.24 billion, with organic growth of 20 percent.
On a conference call following release of the results, Labcorp CEO Adam Schechter said the company "experienced broad geographic recovery in our base business and across our testing portfolio" with esoteric and routine testing showing "solid year-over-year growth."
He added that the company saw improvements in its drug development business with roughly 85 percent of its sites now open and decentralized trials increasing by more than 50 percent year over year.
Labcorp saw a decline in SARS-CoV-2 test volumes but levels were nonetheless higher than the company had anticipated, Schechter said. It averaged 85,000 molecular SARS-Cov-2 tests per day during the quarter, up from 54,000 per day in Q2. The company averaged 114,000 tests per day in September, though volumes have declined week over week since then, he said.
He added that Labcorp would continue to maintain high SARS-CoV-2 testing capacity "to be prepared for potential future scenarios."
Schechter highlighted the receipt during the quarter of US Food and Drug Administration Emergency Use Authorization for a combined COVID-19 and flu at-home collection kit as well as the launch of Adaptive Biotechnologies' clonoSEQ assay for monitoring residual blood cancer.
During Q3 2021, net earnings attributable to Labcorp were $587.3 million, or $6.05 per share, compared to $703.4 million, or $7.17 per share, in the same quarter last year. Adjusted EPS for the quarter was $6.82 and beat the analysts' average estimate of $4.92.
The company's SG&A costs were $519.9 million, up 24 percent from $419.5 million in the same quarter last year.
Labcorp raised its full-year 2021 guidance to revenue growth of 13 percent to 14 percent from a previous projection of 7 percent to 9 percent. It projected adjusted EPS of $26.00 to $28.00, up from its previous guidance of $21.50 to $25.00. The guidance assumes growth of between 16 percent and 17 percent in the company's base testing business and a decline of between 6 percent and 11 percent in its COVID-19 testing business.
The company ended the quarter with $2.04 billion in cash and cash equivalents.
In Thursday morning trading on the New York Stock Exchange, Labcorp shares were down 1 percent to $277.81.