Labcorp lifts annual profit forecast on strong testing demand

• Labcorp raised its 2026 adjusted earnings forecast to $18.10-$18.55 per share, with a midpoint of $18.33 exceeding the analyst estimate of $18.01
• Second-quarter revenue rose 5.8% to $3.73 billion, beating estimates of $3.71 billion, with Biopharma Laboratory Services segment growing 6.5% to $836.2 million
• Diagnostics Laboratories revenue grew 5.5% to $2.90 billion but slightly missed expectations of $2.91 billion, trailing competitor Quest Diagnostics' stronger organic growth

Labcorp Raises Annual Profit Forecast on Strong Testing Demand

Laboratory Corporation of America (Labcorp) raised its full-year profit forecast and exceeded second-quarter expectations on July 30, driven by steady demand for diagnostic testing and growth in drug-development services.

Key Financial Updates:

• The company increased its 2024 adjusted earnings forecast to $18.10-$18.55 per share, with a midpoint of $18.33 exceeding the analyst estimate of $18.01
• Annual revenue guidance raised to $14.71-$14.83 billion from the previous $14.65-$14.80 billion range
• Q2 revenue rose 5.8% to $3.73 billion, beating estimates of $3.71 billion

Segment Performance:

• Diagnostics Laboratories revenue grew 5.5% to $2.90 billion, slightly missing the $2.91 billion estimate
• Biopharma Laboratory Services segment revenue jumped 6.5% to $836.2 million, surpassing estimates of $797.3 million

Market Context:

The diagnostics business benefited from specialty testing and laboratory management agreements, while improved pharmaceutical and biotechnology spending supported the research services division. However, analysts noted softer-than-expected organic growth in the Diagnostics segment compared to competitor Quest Diagnostics, which raised its profit forecast last week after strong routine testing demand.

Competitive Landscape:

Peer Quest Diagnostics set a higher benchmark with its recent results, drawing investor attention to Labcorp's comparatively modest diagnostics growth. Despite this, Labcorp's diversified revenue streams and strong biopharma services performance enabled the company to deliver solid overall results and an optimistic outlook for the year.