Surging growth drives Labcorp past Street expectations

BURLINGTON – Laboratory Corp. of America Holdings (LH) beat the Street with its latest financials reported early Thursday. And its top exec was upbeat about the report. And shares climbed more than 3% in premarket trading.

“Labcorp’s ability to harness science, innovation and technology helped us advance our strategy, effectively respond to the global pandemic, and drive meaningful financial performance throughout 2021,” said Adam Schechter, chairman and CEO of Labcorp. “We experienced Base Business growth of 8.2% in the fourth quarter and 19.4% in 2021. This provides significant momentum and sets the stage for continued Base Business growth in 2022 and beyond.”

The Burlington-based life science giant said it had profit of $5.75 per share. Earnings, adjusted for non-recurring costs, came to $6.77 per share.

The results surpassed Wall Street expectations. The average estimate of seven analysts surveyed by Zacks Investment Research was for earnings of $5.90 per share.

The medical laboratory operator posted revenue of $4.06 billion in the period, also beating Street forecasts. Seven analysts surveyed by Zacks expected $3.94 billion.

For the year, the company reported profit of $2.38 billion, or $24.39 per share. Revenue was reported as $16.12 billion.

LabCorp expects full-year earnings in the range of $17.25 to $21.25 per share.

Essential figures

LabCorp cited numerous points in its presentation about the company’s performance:

Revenue: Q4 of $4.1 billion, versus $4.5 billion last year; Full year of $16.1 billion, versus $14.0 billion last year
Diluted EPS: Q4 of $5.75, versus $9.54 last year; Full year of $24.39, versus $15.88 last year
Adjusted EPS: Q4 of $6.77, versus $10.56 last year; Full year of $28.52, versus $23.94 last year
Free Cash Flow: Q4 of $548 million, versus $675 million last year; Full year of $2.6 billion, versus $1.8 billion last year
Strengthened leading oncology position by agreeing to acquire Personal Genome Diagnostics Inc.
Announced yesterday a comprehensive, long-term strategic agreement with Ascension; Arrangement includes acquisition of certain outreach laboratory assets with annual revenues of approximately $150 million and a purchase price of $400 million
Full-Year 2022 Guidance: Adjusted EPS of $17.25 to $21.25 and Free Cash Flow of $1.7 billion to $1.9 billion
Longer-Term Outlook (2022-2024): Base Business organic revenue compound annual growth of 4%-7% versus 2021; Base Business average annual margin expansion of 30 bps to 50 bps versus 2021; adjusted EPS compound annual growth of 11%-14% versus 2019

You can read the full financial report online.