Labcorp Announces 2024 Third Quarter Results
Updates Full-Year Guidance
Results from Continuing Operations for third quarter 2024 versus last year:
Revenue: $3.28 billion versus $3.06 billion
Diluted EPS: $2.00 versus $2.11
Adjusted EPS: $3.50 versus $3.38
Free Cash Flow: $162 million versus $171 million
Updated Full-Year 2024 Guidance:
Revenue range of 6.6% to 7.3%; midpoint unchanged
Adjusted EPS range of $14.30 to $14.70; midpoint down $0.10, due to the negative impact from weather of approximately $0.15
Free Cash Flow of $850 million to $980 million
Announced three new acquisitions/lab management agreements, and closed two acquisitions during the quarter that support growth initiatives
BURLINGTON, N.C., Oct. 24, 2024 /PRNewswire/ -- Labcorp (NYSE:LH), a global leader of innovative and comprehensive laboratory services, today announced results for the third quarter ended September 30, 2024 and updated full-year guidance.
"Labcorp achieved strong performance in Diagnostics and Biopharma Laboratories, including robust organic growth in the third quarter," said Adam Schechter, chairman and CEO of Labcorp. "Our results demonstrate momentum in our core businesses as we introduced new tests, and extended our leadership position in specialty testing. We announced or completed several transactions with health systems and regional/local laboratories, which aligns with our acquisition strategy. We are on track to finish 2024 with strong growth as we focus on science, technology, and innovation and bring new tests and services to our customers."
Labcorp advanced key growth initiatives that supported its strategy:
Announced an agreement to acquire select operating assets of Ballad Health's outreach lab services, expanding the company's laboratory and testing capabilities to rural communities in Tennessee, Virginia, North Carolina and Kentucky.
Entered into a strategic collaboration with Naples Comprehensive Healthcare in Southwest Florida to manage the daily operations of its inpatient lab operations.
Signed a new agreement to acquire select assets of Lab Works, an independent clinical laboratory located in Alabama.
Closed the previously announced acquisition of select assets of BioReference Health's laboratory testing business.
Completed the acquisition of select assets of Invitae ("Invitae"), extending Labcorp's leadership in specialty testing and ability to utilize genetic data to improve clinical trials and treatment regimens in oncology and select rare diseases.
The company continues to make strides in science, technology, and innovation:
Announced an expanded collaboration with Ultima Genomics to utilize its UG 100TM sequencing solution and ppmSeqTM technology to explore new whole genome sequencing clinical applications, including MRD in patients with early-stage solid tumor cancers.
Received De Novo marketing authorization from the FDA for PGDx elio plasma focus Dx, the industry's only kitted, pan-solid tumor liquid biopsy test.
Expanded Labcorp OnDemand offerings with additional consumer-initiated tests, including Syphilis and Luteinizing Hormone tests.
Introduced a new Order Tracker Experience for Diagnostics customers, offering the majority of providers real-time visibility of test order status.
Announced the expansion of its women's health solutions to include a personalized, comprehensive Postpartum Experience, through Ovia Health by Labcorp.
Subsequent to the quarter, announced an exclusive agreement with NowDiagnostics (NOWDx) to distribute the first over-the-counter, point-of-care Syphilis blood test granted marketing authorization by the FDA.
On October 10, 2024, Labcorp announced a quarterly cash dividend of $0.72 per share of common stock, payable on December 13, 2024, to stockholders of record at the close of business on November 26, 2024.
LABCORP HOLDINGS INC.
CONSOLIDATED RESULTS
Three Months Ended Sep 30,
Nine Months Ended Sep 30,
2024
2023
Delta
2024
2023
Delta
Revenue Summary (Dollars in billions)
Total Revenue
$ 3.28
$ 3.06
7.4 %
$ 9.68
$ 9.13
6.0 %
Organic
4.2 %
3.4 %
Base Business (1)
4.8 %
4.5 %
COVID 19 Testing (2)
(0.6 %)
(1.1 %)
Acquisitions net of Divestitures
3.1 %
2.4 %
Foreign Exchange
0.1 %
0.2 %
(1) Base Business includes Labcorp's operations except for COVID-19 Testing.
(2) COVID-19 Testing represents COVID-19 PCR Testing.
Earnings Summary (Dollars in millions, except per share data)
Operating Income ("OI")
$ 254.1
$ 252.3
$ 870.2
$ 848.4
OI as % of Revenue
7.7 %
8.3 %
(50) bps
9.0 %
9.3 %
(30) bps
Adjustments (3)
$ 187.0
$ 171.6
$ 503.6
$ 471.6
Adjusted Operating Income ("AOI") (4)
$ 441.1
(5)
$ 423.9
$ 1,373.8
$ 1,320.0
AOI as % of Revenue
13.4 %
13.9 %
(40) bps
(6)
14.2 %
14.5 %
(30) bps
Net Earnings from Cont. Ops
$ 169.6
$ 183.6
$ 603.5
$ 547.2
Diluted EPS from Cont. Ops
$ 2.00
$ 2.11
$ 7.13
$ 6.19
Adjusted EPS (4)
$ 3.50
$ 3.38
$ 11.12
$ 10.26
(3) Adjustments include amortization, impairment charges, restructuring charges, and special items.
(4) Non-GAAP financial measure[s]. See "Reconciliation of Non-GAAP Measures" for additional information.
(5) The increase in adjusted operating income was primarily due to organic demand and LaunchPad savings, partially offset by higher personnel costs and the loss from Invitae.
(6) The decrease in adjusted operating margin was due to Invitae.
LABCORP HOLDINGS INC.
CONSOLIDATED RESULTS
Three Months Ended Sep 30,
Nine Months Ended Sep 30,
2024
2023
2024
2023
Cash Flow Summary (Dollars in millions)
Operating Cash Flow from Cont. Ops
$ 277.3
(7)
$ 275.5
$ 808.6
$ 622.7
Capital Expenditures
115.8
104.9
$ 377.8
$ 286.4
Free Cash Flow from Cont. Ops
$ 161.5
$ 170.6
$ 430.8
$ 336.3
(7) Includes a use of cash from Invitae.
Capital Allocation Summary
At the end of the quarter, Labcorp's cash balance was $1.52 billion and total debt was $6.75 billion. The higher balances are due to Labcorp's financing activities to pre-fund maturing debt, over the next four months.
During the quarter, the company invested $458.1 million on acquisitions, paid out $60.5 million in dividends, and used $75.0 million for share repurchases.
LABCORP HOLDINGS INC.
Diagnostics Laboratories Segment Summary
Three Months Ended Sep 30,
2024
2023
Delta
Revenue Summary (Dollars in billions)
Total Revenue
$ 2.55
$ 2.34
8.9 %
Organic
5.0 %
Base Business
5.7 %
COVID 19 Testing
(0.7 %)
Acquisitions net of Divestitures
4.0 %
Foreign Exchange
(0.1 %)
Earnings Summary (1) (Dollars in millions)
Adjusted Operating Income ("AOI") (2)
$ 387.4
$ 386.3
AOI as % of Revenue
15.2 %
16.5 %
(130) bps
(3)
(1) Non-GAAP financial measure[s]. See "Reconciliation of Non-GAAP Measures" for additional information.
(2) Excludes amortization, restructuring charges, special items, and unallocated corporate expenses.
(3) Adjusted operating margin was down due to Invitae, the impact from days and weather.
Three Months Ended Sep 30,
2024
Requisition
Price/Mix
Volume Delta (4)
Delta (4)
Metrics Summary (1)
Total
5.1 %
3.8 %
Organic (5)
2.2 %
2.7 %
Base Business
2.7 %
(6)
3.0 %
COVID 19 Testing
(0.5) %
(0.3) %
Acquisitions net of Divestitures
2.8 %
1.2 %
Foreign Exchange
— %
(0.1) %
(4) Column shows changes versus the three months ended September 30, 2023.
(5) Organic price/mix includes lab management agreements.
(6) Includes the negative impact from adverse weather of approximately 40 bps.
LABCORP HOLDINGS INC.
Biopharma Laboratory Services Segment Summary
Three Months Ended Sep 30,
2024
2023
Delta
Revenue Summary (Dollars in millions)
Total Revenue
$ 737.7
$ 719.1
2.6 %
(1)
Organic
2.0 %
Acquisitions net of Divestitures
— %
Foreign Exchange
0.6 %
(1) Central Labs revenue growth of 9.4%, partially offset by Early Development revenue decline of (11.1%).
Earnings Summary (2) (Dollars in millions)
Adjusted Operating Income ("AOI") (3)
$ 120.9
(4)
$ 109.0
AOI as % of Revenue
16.4 %
15.2 %
120 bps
(4)
(2) Non-GAAP financial measure[s]. See "Reconciliation of Non-GAAP Measures" for additional information.
(3) Excludes amortization, restructuring charges, special items, and unallocated corporate expenses.
(4) Adjusted operating income and margin increased due to organic demand and LaunchPad savings, partially offset by higher personnel costs.
As of Sep, 30,
2024
Metrics Summary (2) (Orders and backlog in billions)
TTM Net Orders
$ 2.90
