On August 1, 2024, Labcorp Holdings Inc (LH, Financial) released its 8-K filing for the second quarter of 2024. Laboratory Corp. of America is one of the nation's two largest independent clinical laboratories, with roughly 20% of the independent lab market. The company operates approximately 2,000 patient-service centers, offering a broad range of 5,000 clinical lab tests, ranging from routine blood and urine screens to complex oncology and genomic testing.
Performance Overview
Labcorp Holdings Inc (LH, Financial) reported a revenue of $3.22 billion for Q2 2024, surpassing the analyst estimate of $3.185 billion. This represents a 6.2% increase from the $3.03 billion reported in the same quarter last year. The company's diluted EPS from continuing operations was $2.43, compared to $1.74 in Q2 2023. Adjusted EPS stood at $3.94, exceeding the analyst estimate of $3.88 and the $3.42 reported in the same period last year.
Financial Achievements and Challenges
Labcorp's revenue growth was driven by a 3.8% increase in organic revenue and a 2.5% contribution from acquisitions, net of divestitures. However, this was slightly offset by a 0.1% negative impact from foreign currency translation. The company's operating income for the quarter was $294.8 million, or 9.2% of revenue, up from $266.3 million, or 8.8%, in Q2 2023. Adjusted operating income was $479.9 million, or 14.9% of revenue, compared to $448.3 million, or 14.8%, in the same period last year.
Income Statement Highlights
| Metric | Q2 2024 | Q2 2023 |
|---|---|---|
| Revenue | $3.22 billion | $3.03 billion |
| Diluted EPS | $2.43 | $1.74 |
| Adjusted EPS | $3.94 | $3.42 |
| Free Cash Flow | $432.9 million | $58.2 million |
Balance Sheet and Cash Flow
Labcorp's cash balance at the end of Q2 2024 was $265.1 million, with total debt amounting to $5.07 billion. The company generated an operating cash flow of $561.1 million, significantly higher than the $161.5 million reported in Q2 2023. Capital expenditures for the quarter were $128.2 million, resulting in a free cash flow of $432.9 million, compared to $58.2 million in the same period last year.
Segment Performance
Labcorp's Diagnostics Laboratories segment reported a revenue of $2.52 billion, a 7.9% increase from $2.34 billion in Q2 2023. The Biopharma Laboratory Services segment generated $707.0 million in revenue, up 1.1% from $699.0 million in the same period last year. Adjusted operating income for the Diagnostics Laboratories segment was $441.5 million, or 17.5% of revenue, while the Biopharma Laboratory Services segment reported an adjusted operating income of $107.4 million, or 15.2% of revenue.
Updated Full-Year Guidance
Labcorp has updated its full-year 2024 guidance, projecting a revenue growth range of 6.4% to 7.5%, including a 1.0% impact from the Invitae acquisition. The company expects adjusted EPS to be in the range of $14.30 to $14.90, with a free cash flow projection of $0.85 billion to $1.00 billion.
“Labcorp delivered strong revenue and EPS growth in the second quarter and has significant momentum as we enter the second half of the year,” said Adam Schechter, chairman and CEO of Labcorp.
For more detailed insights and to access the full earnings report, visit the 8-K filing.
Explore the complete 8-K earnings release (here) from Labcorp Holdings Inc for further details.
