LabCorp’s 1st-qtr profit holds steady as restructuring costs cancel out higher testing revenue

LabCorp profit unchanged as costs balance revenue

BURLINGTON, N.C. — Clinical lab services company Laboratory Corp. of America Holdings said Wednesday its profit was nearly unchanged in the first quarter, as greater revenue was canceled out by the costs of cutting jobs and closing facilities.

LabCorp said its profit totaled $132.7 million, or $1.25 per share. That compares to $132.8 million, or $1.22 per share, one year ago. Its per-share profit grew because the company now has less stock on the market due to a share repurchase. Excluding one-time costs related to staff cuts, the company said it earned $1.30 per share. Revenue increased 3 percent, to $1.19 billion from $1.16 billion.

Analysts were expecting a profit of $1.31 per share and revenue of $1.19 billion, according to a Thomson Reuters survey.

LabCorp said its testing volume fell 3 percent during the quarter, but revenue per test grew 6.4 percent. Excluding the consolidation of a joint venture in Ontario, Canada, it said revenue rose 2.2 percent, testing volume fell 3.3 percent, and revenue per test rose 5.7 percent.

Bad weather reduced profit by about 8 cents per share, revenue by about $23 million, and testing volume by 1.3 percent, the company said. Two large government contracts expired at the end of 2009, which reduced testing volume by another 2.4 percent.

LabCorp said it took a $9.3 million charge related to severance payment and closing redundant or underused facilities, along with write-off costs. The company did not specify how many jobs were eliminated.

The company backed its forecasts for the year, saying it expects a profit of $5.35 to $5.55 per share. LabCorp said revenue should grow 2.5 percent to 4.5 percent, which implies a total of $4.81 billion to $4.91 billion.

Analysts expect a profit of $5.46 per share and $4.87 billion in revenue on average.

In afternoon trading, LabCorp shares rose 56 cents to $80.80. Earlier they reached an annual high of $83.