Payment challenges chip at LabCorp revenue as earnings miss
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Burlington, N.C. — LabCorp (NYSE: LH) processed more tests in the fourth quarter than it did same period in the prior year but it made less money per test and the laboratory testing and diagnostics firm’s revenue and earnings results fell short of analyst estimates.
Burlington-based LabCorp reported $1.43 in fourth quarter revenue, a 2.3 percent increase compared to the fourth quarter of 2012. While revenue per test was flat compared to the prior quarter, it decreased 2.6 percent year over year. Excluding certain one-time items, LabCorp’s earnings per share were $1.61. On average, analysts polled by Thomson Reuters estimated LabCorp would report earnings of $1.66 per share on revenue of $1.45 billion.
Reimbursement challenges continue to stymie LabCorp. The company said government payment reductions for its tests as well as molecular pathology payment issues are reducing its sales; revenue per requisition was down 2 percent year over year.
For the year, LabCorp reported net earnings of $573.8 million; $6.25 per diluted share. 2013 revenue was $5.8 billion, a 2.4 percent increase over 2012. Compared to 2012, testing volume, measured by requisitions, increased 4.0 percent and revenue per requisition decreased 1.6 percent.
“We are pleased with our 2013 performance, especially given the significant government payment reductions and the unexpected reimbursement issues related to new molecular pathology codes,” LabCorp Chairman and CEO David King said in a statement. “In 2014, we will focus on the execution of our five-pillar strategy and disciplined capital allocation to grow the business and create shareholder value in the years ahead.”
Shares in LabCorp fell 2.3 percent to $88.22 in mid-morning trading Friday.
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