LabCorp's Q4 sales, profit rise as diagnostics unit posts gains of 3.7%

Headline results for the fourth quarter:

Revenue

$2.95 billion (forecasts of $2.93 billion)

+6%

Profit

$227 million

Versus $158 million

Note: All changes are versus the prior-year period unless otherwise stated

What the company said:

"We had a strong finish to 2019, a year where we delivered solid revenue growth, adjusted earnings per share and free cash flow," remarked Adam Schechter, who replaced David King as CEO on November 1. "We start 2020 with a clear strategy…[and] are well-positioned to drive continued growth and shareholder value in 2020 and beyond," Schechter added.

Other results:

  • Diagnostics: $1.8 billion, up 3.7%, due to acquisitions and organic growth, partially offset by the negative impact from the disposal of businesses
  • Covance: $1.2 billion, up 9.3%, with gains from acquisitions and organic growth countered in part by the disposition of the Covance research products business
  • Full-year revenue: $11.6 billion, up 2%
  • Full-year profit: $824million, versus $884 million in 2018

Looking ahead:

LabCorp projects full-year revenue growth in the range of 4% to 6%, with sales in the diagnostics segment expected to rise between 0.5% and 2.5% as compared to 2019 revenue of $7 billion. LabCorp also anticipates adjusted earnings per share to range from $11.75 to $12.15, representing an increase of 3.8% to 7.3% over 2019. Analysts project earnings of $11.98 per share on revenue growth of 3.5% to $11.9 billion for the year. 

The company indicated that it has seen little impact on its business from the COVID-19 outbreak, although Schechter said "we'll have to watch quarter-by-quarter if there's any minor impact." The executive added "but over the year period of time, we think that we'll be fine based on what we know today." LabCorp also disclosed that it has started work on developing a test for COVID-19.

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