01—Abstract
Summary
Summary of the 8-K filed August 1, 2024. Cited figures are marked; the original filing is the authoritative source.
Labcorp Holdings Inc. filed this Form 8-K on August 1, 2024, furnishing its press release (Exhibit 99.1) announcing second-quarter 2024 results and updated full-year 2024 guidance.
Revenue for the quarter was $3.22 billiona, up 6.2% from $3.03 billion, with organic revenue growth of 3.8%. Diluted EPS from continuing operations rose to $2.43 from $1.74, and adjusted EPS rose to $3.94 from $3.42. Free cash flow from continuing operations was $432.9 million versus $58.2 million a year earlier.
The company updated its 2024 guidance: revenue growth of 6.4% to 7.5% (including an Invitae impact of about 1.0%), adjusted EPS of $14.30 to $14.90b (including about $0.40 of Invitae dilution), and free cash flow of $0.85 billion to $1.00 billion (including about $150 million of Invitae cash usage). The Board also increased the share repurchase authorization by $1.0 billion to a total of $1.4 billion. Management cited momentum entering the second half, and the Invitae asset acquisition was expected to close in early August.
At quarter end, cash was $265.1 millionc and total debt was $5.07 billion. Diagnostics Laboratories revenue grew 7.9% to $2.52 billion, and Biopharma Laboratory Services revenue grew 1.1% to $707.0 million, with backlog of $7.92 billion, down (0.6)% year over year. The filing also notes a quarterly dividend of $0.72 per share payable September 13, 2024.
02—Key points
Key Highlights
- Q2 2024 revenue of $3.22 billion, up 6.2% from $3.03 billion; organic revenue grew 3.8%.
- Diluted EPS from continuing operations of $2.43 versus $1.74; adjusted EPS of $3.94 versus $3.42.
- Free cash flow from continuing operations of $432.9 million versus $58.2 million in Q2 2023.
- Full-year 2024 guidance updated: revenue growth of 6.4% to 7.5%, adjusted EPS of $14.30 to $14.90, free cash flow of $0.85 billion to $1.00 billion.
- Invitae acquisition (select assets) approved and expected to close in early August; guidance includes about $0.40 of EPS dilution and about $150 million of cash usage.
- Share repurchase authorization increased by $1.0 billion to $1.4 billion; quarterly dividend of $0.72 per share declared.
- Diagnostics Laboratories revenue up 7.9% to $2.52 billion; Biopharma Laboratory Services backlog of $7.92 billion, down (0.6)% year over year.
03—Questions
Frequently Asked Questions
How did Labcorp perform in the second quarter of 2024?
Revenue was $3.22 billion, up 6.2% from $3.03 billion, and diluted EPS from continuing operations was $2.43 versus $1.74. Adjusted operating margin was 14.9% of revenue, compared with 14.8% a year earlier.
What changed in Labcorp's 2024 guidance?
Revenue growth guidance is 6.4% to 7.5%, adjusted EPS is $14.30 to $14.90, and free cash flow from continuing operations is $0.85 billion to $1.00 billion. The guidance includes the expected impact of the Invitae acquisition, approximately 1.0% of revenue growth, $0.40 of adjusted EPS dilution, and about $150 million of cash usage.
What is the Invitae transaction?
Labcorp received approval to acquire select assets from Invitae, a medical genetics company, to use genetic insights in developing treatments and personalized care in oncology and select rare diseases. The transaction is expected to close in early August 2024.
What capital return actions did Labcorp announce?
The Board increased the share repurchase authorization by $1.0 billion to a total of $1.4 billion, and a quarterly cash dividend of $0.72 per share was announced, payable September 13, 2024, to holders of record on August 29, 2024. During the quarter, the company used $100.0 million for share repurchases and paid $60.4 million in dividends.
What was Labcorp's financial position at the end of the quarter?
Cash and cash equivalents were $265.1 million, and total debt was $5.07 billion. Short-term borrowings and current portion of long-term debt were $2,019.5 million as of June 30, 2024.
04—Continue