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Mar 31, 2020
LabCorp Q1 2020 Earnings Report
LabCorp's Q1 2020 results were impacted by the COVID-19 pandemic, but the company delivered solid performance across the company.
Key Takeaways
LabCorp announced its Q1 2020 results with a revenue of $2.82 billion, a 1% increase compared to last year. Diluted EPS was ($3.27), including goodwill and other asset impairments. Adjusted EPS was $2.37, negatively impacted by COVID-19. Free cash flow was $97 million, up 36% year-over-year. The company withdrew its 2020 guidance due to the unpredictability of the COVID-19 pandemic.
Q1 revenue increased by 1% year-over-year to $2.82 billion.
Diluted EPS was ($3.27), which include goodwill and other asset impairments of $4.43 per share.
Adjusted EPS was $2.37, negatively impacted by an estimated $0.55 per share from the COVID-19 pandemic.
Free cash flow was $97 million, a 36% increase compared to the previous year.
LabCorp
LabCorp
LabCorp Revenue by Segment
Revenue by Segment
Diagnostics Revenue
CapyFin.comBiopharma Lab Services Revenue
CapyFin.com Forward Guidance
Given the ongoing and rapidly changing nature of the COVID-19 pandemic, there is significant uncertainty regarding the duration and severity of the pandemic as well as any future government restrictions. As a result, the Company is withdrawing its 2020 financial guidance provided on February 13, 2020.
Positive Outlook
- LabCorp expects to deliver solid adjusted EPS in 2020.
- LabCorp expects to deliver solid free cash flow in 2020.
- As of March 31, 2020, the Company had $324 million of cash.
- The company had $924 million available under its revolving credit facility, which matures in 2022.
- The Company maintains investment grade debt ratings and believes that it will be able to repay these notes with available cash on hand, cash generated from operations, borrowings under its revolving credit facility, or through refinancing in the public debt market.
Challenges Ahead
- The company has been impacted by COVID-19, including overall customer caution as well as government restrictions and social distancing guidelines.
- In LabCorp Diagnostics, demand for testing declined 50% to 55% versus the Company's normal daily levels at the end of the first quarter.
- In Covance Drug Development, performance has been challenged by COVID-19 due to actions clients are taking that are slowing clinical trial progress and the associated testing as well as reductions in trial site access in certain countries and interruptions in the supply chain that can temporarily delay study activity.
- The company is temporarily suspending its share repurchase program.
- During the fourth quarter of 2020, $412 million of the Company's senior notes become payable.
Revenue & Expenses
Visualization of income flow from segment revenue to net income