Lab Corp. (LH) Tops Q2 EPS by $1.58, Revenues Beat
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Revenue Growth %: -15.9%
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Gross profit: 788.4M
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Lab Corp. (NYSE: LH) reported Q2 EPS of $2.57, $1.58 better than the analyst estimate of $0.99. Revenue for the quarter came in at $2.8 billion versus the consensus estimate of $2.5 billion.
- Q2 revenue of $2.8 billion, down (4%) from $2.9 billion last year
- Q2 diluted EPS of $2.37, up 23% from $1.93 last year; Q2 adjusted EPS of $2.57, down (12%) from $2.93 last year
- Q2 free cash flow of $272 million, up from $168 million last year
- Processed more than 8.5 million molecular COVID-19 tests to date, increased capacity to approximately 180 thousand tests per day, and delivering results on average in 2 to 3 days with faster results for hospitalized patients
- Granted Emergency Use Authorization for molecular COVID-19 pooled testing
- Enhanced global hybrid and virtual trials capabilities with acquisition of GlobalCare in July
“We continue to bring the full power of our combined diagnostics and drug development capabilities against this virus, applying our scientific expertise and ingenuity across all aspects of testing, treatments, and vaccines," said Adam Schechter, chairman and CEO, LabCorp. "During the second quarter, we delivered solid performance across the company despite the impact of the pandemic. I continue to be impressed with how quickly our teams have rallied to confront each and every challenge put before them, and I want to thank our 65,000 employees, as their efforts have been heroic during this difficult time.”
Outlook for 2020
Given the continued unpredictability pertaining to the COVID-19 pandemic and the corresponding government restrictions and customer behavior, there are a wide-range of feasible financial outcomes. As a result, the Company continues to not provide 2020 guidance. While LabCorp's Base Business continues to be negatively impacted by the COVID-19 pandemic, the Company's outlook has improved across the enterprise.
In LabCorp Diagnostics, demand for its Base Business continues to be below the Company's historical levels; however, this business has been steadily recovering from its trough in April, while at the same time COVID-19 Testing continues to grow. To date, LabCorp has performed more than 8.5 million molecular COVID-19 tests as well as more than 2 million serology COVID-19 tests. The Company's current molecular COVID-19 testing capacity is approximately 180,000 tests per day and growing.
In Covance Drug Development, while it is expected that the pandemic will continue to negatively impact its business, this impact is expected to subside throughout the year through continuing to work on projects supporting global vaccine and treatment development, with additional support from growth of COVID-19 Testing.
As previously announced, the Company instituted numerous actions to help mitigate the financial impact from the COVID-19 pandemic, which included furloughs, reduced hours, and the suspension of discretionary merit adjustments and 401(k) contributions. In response to LabCorp's improved outlook, the Company has been resuming regular work schedules and is proceeding with merit adjustments and will retroactively reinstate 401(k) contributions.
For earnings history and earnings-related data on Lab Corp. (LH) click here.
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