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LabCorp Q4 Revenues Rise 6 Percent

NEW YORK – Laboratory Corporation of America on Thursday reported 6 percent year-over-year revenue growth for the fourth quarter, driven by growth in its diagnostics and Covance drug development businesses.

Total revenues for the quarter ended Dec. 31, 2019 were $2.95 billion, up from $2.79 billion in the same quarter last year and beating analysts' average estimate of $2.93 billion.

Diagnostics revenues for the fourth quarter were $1.76 billion, up 4 percent from $1.69 billion in the same quarter last year. The company's Covance drug development business saw revenues rise 9 percent to $1.2 billion in the quarter from $1.1 billion in the fourth quarter 2018.

More than 3 percent of LabCorp's diagnostics business growth came from acquisitions and the rest came from organic growth, but revenue growth was partly offset by a negative impact from the disposition of businesses. The company's diagnostics revenues also included a negative impact from the Protecting Access to Medicare Act (PAMA) of 1.5 percent, the firm said.

Net earnings attributable to LabCorp for Q4 were $227.1 million, or $2.32 per share, compared to net earnings of $157.9 million, or $1.56 per share, in the same quarter last year. Adjusted EPS for Q4 2019 was $2.86, beating the consensus Wall Street estimate of $2.80.

The company's SG&A costs were $413.9 million, up 4 percent from $396.9 million in the same quarter last year.

For full-year 2019, revenues were $11.55 billion, up 2 percent from to $11.33 billion in 2018 and beating analysts' average estimate of $11.53 billion. The diagnostics division posted $7.0 billion in revenues, down 4 percent from $7.03 billion in 2018. Full-year revenues in the Covance business grew 6 percent to $4.58 billion from $4.31 billion.

Net earnings for the year attributable to LabCorp were $823.8 million, or $8.35 per share, compared to $883.7 billion, or $8.61 per share, in 2018. Adjusted EPS for full-year 2019 was $11.32, beating the consensus Wall Street estimate of $11.26.

For 2019, LabCorp spent $1.62 billion on SG&A, up 3 percent from $1.57 billion in 2018.

The company finished 2019 with cash and equivalents of $337.5 million.

For 2020, LabCorp projected year-over-year revenue growth of 4 percent to 6 percent. The revenue projections included a negative impact from the disposition of business of approximately 0.2 percent and a benefit from foreign currency translation of 0.4 percent.

The diagnostics business is expected to grow 0.5 percent to 2.5 percent year over year, including a negative impact from PAMA of approximately slightly more than 1 percent.

Year-over-year revenue growth in 2020 for the firm's Covance drug development business is anticipated to be between 7 percent and nearly 10 percent, which includes the negative impact from the disposition of business of approximately a half a percent and a benefit from foreign currency translation of nearly 1 percent.

The firm said it anticipates an adjusted EPS for 2020 of $11.75 to $12.15.

LabCorp shares were trading up more than 2 percent at $191.96 in morning trading on the New York Stock Exchange.