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LabCorp Q2 Revenues Improve 4 Percent; Firm Adjusts 2013 EPS Guidance

NEW YORK (GenomeWeb News) – Revenues for Laboratory Corporation of America's second quarter rose almost 4 percent year over year, it reported today.

Total revenues reached $1.47 billion for the three months ended June 30, up from $1.42 billion a year ago, and edging out the average Wall Street estimate of $1.46 billion.

Testing volume, measured by requisitions, increased 5 percent, while revenue per requisition declined 2 percent due to a reduction in Medicare payments, delays and denials of coverage for existing tests by some payors after implementation of recently adopted molecular pathology codes, and sequestration. LabCorp also said its drugs of abuse testing saw "strong growth."

The company recorded a profit of $152.3 million, or $1.62 per share, in the quarter, compared to $153.8 million, or $1.56 per share, a year ago. On an adjusted basis, EPS was $1.80, matching the consensus Wall Street estimate.

During the quarter, LabCorp took a restructuring charge of $6.6 million, compared to $3.4 million a year ago. Its SG&A expenses inched up a fraction of 1 percent to $280.9 million from $279.5 million in the year-ago period.

LabCorp repurchased $362 million of stock, or about 3.7 million shares, in the second quarter, and as of June 30, $592.1 million of repurchase authorization remained under its previously approved buyback plan.

The Burlington NC-based company ended the quarter with $111.3 million in cash and short-term investments, it said.

LabCorp also updated its guidance for full-year 2013. It reiterated an earlier forecast of revenue growth of between 2 and 3 percent, but changed its adjusted EPS guidance. EPS, excluding amortization, is now expected to be in the range of $6.90 to $7.10, compared to an earlier guidance of $6.85 to $7.15. The new range includes the negative impact of about $.35 from Medicare payment reductions, but excludes any impact from share buybacks after June 30.