BURLINGTON, N.C. – Shares in Laboratory Corporation of America dropped more than 10 percent on Thursday after the huge clinical laboratory services firm disclosed it had lost a major contract.
Before the markets opened Thursday, LabCorp (NYSE: LH) said that Aetna would no longer use its services once an existing contract expired on July 1.
LabCorp shares dropped 10.6 percent, or $8.48, to $71.28 in afternoon trading. By the close, shares were off $9.51, or 12 percent, to end the day at $70.71.
Losing the contract will cost LabCorp between 4-12 cents per share in profits this year, the company said. The company had forecast earnings of between $3.93 and $4.09 for this year before the Aetna announcement.
Analyst firm Piper Jaffray reduced its rating of LabCorp’s stock to market perform from outperform.
"We are disappointed with Aetna’s decision, but we are confident in our strategy for profitable growth," said David King, LabCorp’s chief executive officer.
LabCorp reported $3.6 billion in revenues in 2006.