Laboratory Corp (NYSE: LH) on Thursday reported second-quarter 2025 adjusted earnings per share of $4.35, up from $3.94 a year ago, beating the consensus of $4.17.
Sales increased 9.5% year-over-year to $3.53 billion, beating the consensus of $3.485 billion.
The increase was due to organic revenue growth of 5.4%, acquisitions, net of divestitures, of 3.5%, and foreign currency translation of 0.6%.
Adjusted operating income for the quarter was $531.6 million, or 15.1% of revenue.
Labcorp delivered double-digit topline growth, while expanding margins across both segments, said Adam Schechter, chairman and CEO of Labcorp. “Based upon our performance in the first half and our momentum going into the second half of the year, we’re raising our guidance,” he added.
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In the second quarter, Labcorp:
- Announced an agreement to acquire select assets of Incyte Diagnostics’ clinical and anatomic pathology testing businesses in the Pacific Northwest.
- Continued to progress the acquisition of select oncology and clinical testing assets from BioReference Health.
- Labcorp acquired select assets of the outreach business from Community Health Systems across 13 states for $195 million in cash.
Guidance: LabCorp raised its fiscal year 2025 adjusted earnings guidance from $15.70-$16.40 to $16.05-$16.50, compared to the consensus of $16.09.
The company also raised 2025 sales guidance from $13.978 billion-$14.148 billion to $14.08 billion-$14.23 billion compared to the consensus of $13.897 billion.
LabCorp forecasts 2025 sales growth of 7.5%-8.6% compared to prior guidance of 6.7%-8%.
The guidance includes 2025 Diagnostics Laboratories sales growth of 7%-8% (compared to prior guidance of 6.5%-7.7%) and Biopharma Laboratory Services sales growth of 6.1%-7.5% (compared to prior guidance of 3.0%-5.0%).
William Blair writes, “In terms of the quarter, organic growth trends in Labcorp’s diagnostics segment improved quarter-over-quarter, though admittedly this growth was a tad below consensus expectations. We are not overly concerned with the slight miss here given what we still believe are favorable tailwinds impacting reference labs, including heightened
utilization trends, stable unit pricing, mix benefits, share wins, and a compelling M&A pipeline.”
Price Action: Laboratory stock is up 11.3% at $278.91 at the last check on Thursday.
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