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Mar 31, 2023
LabCorp Q1 2023 Earnings Report
Labcorp's financial performance was impacted by a decline in COVID-19 testing revenue, which was partially offset by growth in the base business. The company is on track to spin off its Clinical Development business (Fortrea) by mid-year and updated its full-year guidance.
Key Takeaways
Labcorp's first quarter results showed a decrease in revenue and earnings compared to the previous year, primarily due to a decline in COVID-19 testing. However, the company's base business experienced growth, and it is progressing with the spin-off of its Clinical Development business. The company updated its full-year guidance for adjusted EPS and free cash flow.
First quarter Base Business revenue grew 10%, while total revenue and earnings were down due to COVID-19 Testing.
Revenue for Q1 was $3.78 billion, compared to $3.90 billion last year.
Diluted EPS for Q1 was $2.39, versus $5.23 last year; Adjusted EPS for Q1 was $3.82, versus $6.11 last year.
Free Cash Flow for Q1 was $27 million, compared to $239 million last year.
LabCorp
LabCorp
LabCorp Revenue by Segment
Revenue by Segment
Diagnostics Revenue
CapyFin.comBiopharma Lab Services Revenue
CapyFin.com Forward Guidance
Labcorp is updating 2023 full year guidance to reflect its first quarter performance and full year outlook. Adjusted EPS narrowed to $16.25 to $17.75 with midpoint unchanged and Free Cash Flow remains at $1.0 billion to $1.2 billion.
Positive Outlook
- Total Labcorp Enterprise revenue is expected to be between $14.9 billion.
- Base Business revenue is expected to grow between 9.5% and 11.0%.
- Total Diagnostics revenue is expected to grow between -0.5% and 2.0%.
- Base Business revenue is expected to grow between 12.5% and 14.0%.
- Total Drug Development revenue is expected to grow between 3.5% and 5.5%.
Challenges Ahead
- COVID-19 Testing revenue is expected to decline between (90.0%) and (80.0%).
- Total Labcorp Enterprise revenue previous guidance was between 1.5% and 4.0%, updated guidance is between 1.5% and 4.0%.
- Base Business revenue previous guidance was between 8.5% and 10.5%, updated guidance is between 9.5% and 11.0%.
- COVID-19 Testing revenue previous guidance was between (90.0%) and (75.0%), updated guidance is between (90.0%) and (80.0%).
- Total Diagnostics revenue previous guidance was between (2.0%) and 1.5%, updated guidance is between (0.5%) and 2.0%.
Revenue & Expenses
Visualization of income flow from segment revenue to net income