01—Abstract
Summary
Summary of the 8-K filed October 24, 2024. Cited figures are marked; the original filing is the authoritative source.
Labcorp Holdings Inc. (NYSE: LH) furnished this Form 8-K on October 24, 2024 under Item 2.02 (Results of Operations and Financial Condition), attaching a press release announcing third-quarter 2024 results and updated full-year guidance.
Third-quarter revenue rose to $3.28 billiona from $3.06 billion, while diluted EPS from continuing operations was $2.00 versus $2.11. Adjusted EPS increased to $3.50 from $3.38, and free cash flow from continuing operations was $161.5 million versus $170.6 million. Company-reported organic revenue growth was 4.2% for the quarter, with acquisitions net of divestitures contributing 3.1%.
For full-year 2024, Labcorp narrowed its revenue growth guidance to 6.6% to 7.3% (midpoint unchanged) and lowered its adjusted EPS range to $14.30 to $14.70b, with the midpoint down $0.10 due to a weather impact of approximately $0.15. Free cash flow guidance is $850 million to $980 million. Management attributed the strength to Diagnostics Laboratories and Biopharma Laboratory Services, and cited a series of acquisitions, lab management agreements and new test launches during the quarter.
Balance sheet items disclosed include cash of $1.52 billionc and total debt of $6.75 billion at quarter end, with the company stating that the higher balances reflect financing activity to pre-fund maturing debt over the following four months. The company also declared a quarterly cash dividend of $0.72 per share, payable December 13, 2024, to holders of record on November 26, 2024.
02—Key points
Key Highlights
- Q3 2024 revenue of $3.28 billion, up from $3.06 billion; organic growth of 4.2% and acquisitions net of divestitures contributing 3.1%
- Adjusted EPS of $3.50 versus $3.38 a year earlier, while GAAP diluted EPS from continuing operations declined to $2.00 from $2.11
- Full-year 2024 revenue growth guidance narrowed to 6.6%–7.3% (midpoint unchanged); adjusted EPS guidance lowered to $14.30–$14.70, with the midpoint down $0.10 due to weather impact of about $0.15
- Full-year free cash flow from continuing operations guided to $850 million–$980 million
- Diagnostics Laboratories AOI margin fell to 15.2% from 16.5%, which the company attributed to Invitae, days and weather; Biopharma Laboratory Services AOI margin rose to 16.4% from 15.2%
- Quarter-end cash of $1.52 billion and total debt of $6.75 billion, with financing undertaken to pre-fund maturing debt over the next four months
- Quarterly dividend of $0.72 per share declared, payable December 13, 2024 to holders of record November 26, 2024
03—Questions
Frequently Asked Questions
How did Labcorp perform in the third quarter of 2024?
Revenue increased to $3.28 billion from $3.06 billion, and adjusted EPS rose to $3.50 from $3.38. GAAP diluted EPS from continuing operations fell to $2.00 from $2.11, and free cash flow from continuing operations was $161.5 million compared with $170.6 million a year earlier.
What changed in Labcorp's full-year 2024 guidance?
Revenue growth guidance was narrowed to 6.6% to 7.3% with the midpoint unchanged. Adjusted EPS guidance is now $14.30 to $14.70, versus the previous $14.30 to $14.90, with the midpoint lowered by $0.10 due to a weather impact of approximately $0.15. Free cash flow guidance is $850 million to $980 million.
What drove growth and margin changes by segment?
Diagnostics Laboratories revenue rose 8.9% to $2.55 billion, with organic growth of 5.0%, but its AOI margin declined to 15.2% from 16.5%, which the company attributed to Invitae, days and weather. Biopharma Laboratory Services revenue rose 2.6% to $737.7 million, with its AOI margin increasing to 16.4% from 15.2% on organic demand and LaunchPad savings.
What acquisitions and strategic activity did Labcorp report?
Labcorp closed the acquisition of select assets of BioReference Health's laboratory testing business and completed the acquisition of select assets of Invitae. It also agreed to acquire select operating assets of Ballad Health's outreach lab services, signed an agreement to acquire select assets of Lab Works, and entered a collaboration with Naples Comprehensive Healthcare to manage its inpatient lab operations. During the quarter, the company invested $458.1 million in acquisitions.
What are the company's capital return and liquidity details?
Labcorp paid $60.5 million in dividends and repurchased $75.0 million of common stock during the quarter. It declared a $0.72 per share quarterly dividend payable December 13, 2024. Cash was $1.52 billion and total debt was $6.75 billion at quarter end, with the company stating the higher balances reflect financing to pre-fund maturing debt over the next four months.
04—Continue