Labcorp reported strong revenue and EPS growth for the second quarter of 2024, reflecting significant momentum as the company progresses into the latter half of the year. Chairman and CEO Adam Schechter highlighted the company’s expansion in oncology, women’s health, and neurology, bolstered by acquisitions and advancements in digital and data solutions. Labcorp aims to drive long-term value through enhanced laboratory and testing solutions, new partnerships with health systems, and leveraging science and technology to advance global health.
Key advancements during the quarter include:
- Acquisition Approval: Labcorp received approval to acquire select assets from Invitae, a leader in medical genetics. This acquisition will enhance Labcorp’s capabilities in personalized oncology treatments and rare disease management, with the transaction expected to close in early August.
- Strategic Collaboration: Labcorp has entered a strategic partnership with Naples Comprehensive Healthcare (NCH) in Southwest Florida to manage NCH’s inpatient lab operations and will serve as the primary lab for NCH’s physician network later this summer.
- Scientific and Technological Progress:
- Received FDA approval for its companion diagnostic for Pfizer’s BEQVEZ™ (fidanacogene elaparvovec-dzkt), a gene therapy for hemophilia B.
- Launched the first trimester preeclampsia screening test in the U.S., enabling early detection of preeclampsia risk.
- Expanded its precision oncology portfolio with new services and introduced Labcorp Global Trial Connect to accelerate clinical trials.
- Enhanced Labcorp OnDemand with new tests, including for drug, testosterone, HIV, and heart health.
Financial Highlights:
Second Quarter Results:
- Revenue: $3.22 billion, up 6.2% from $3.03 billion in Q2 2023, driven by a 3.8% increase in organic revenue and acquisitions.
- Operating Income: $294.8 million (9.2% of revenue), compared to $266.3 million (8.8%) in Q2 2023. Adjusted operating income was $479.9 million (14.9% of revenue), up from $448.3 million (14.8%).
- Net Earnings: $205.6 million, up from $155.2 million. Diluted EPS rose to $2.43 from $1.74. Adjusted EPS increased to $3.94 from $3.42.
- Operating Cash Flow: $561.1 million, up from $161.5 million. Free cash flow was $432.9 million, compared to $58.2 million.
- Cash Balance: $265.1 million. Total debt stood at $5.07 billion. Investments included $33.9 million in acquisitions, $60.4 million in dividends, and $100.0 million in share repurchases.
Year-To-Date Results:
- Revenue: $6.40 billion, up 5.4% from $6.07 billion, with organic growth of 3.0% and acquisitions.
- Operating Income: $616.1 million (9.6% of revenue), compared to $596.1 million (9.8%). Adjusted operating income was $932.7 million (14.6%), up from $896.1 million (14.8%).
- Net Earnings: $433.9 million, up from $363.6 million. Diluted EPS increased to $5.13 from $4.08. Adjusted EPS was $7.62 compared to $6.88.
- Operating Cash Flow: $531.3 million, up from $347.2 million. Free cash flow was $269.3 million, compared to $165.7 million.
Segment Results:
- Diagnostics Laboratories: Revenue of $2.52 billion, up 7.9%, driven by organic growth and acquisitions. Adjusted operating income was $441.5 million (17.5% of revenue).
- Biopharma Laboratory Services: Revenue of $707.0 million, up 1.1%. Adjusted operating income was $107.4 million (15.2% of revenue). The segment’s backlog was $7.92 billion, with $2.50 billion expected to convert into revenue in the next twelve months.
Labcorp anticipates growth in net orders and backlog in the second half of the year.
