Labcorp's Q1 Revenue Falls On Decline In COVID-19 Testing Sales

• Laboratory Corp of America Holdings LH Q1 FY23 revenue decreased 3.1% Y/Y to $3.78 billion, beating the consensus of $3.69 billion. The decrease was due to an organic revenue decline of 3.6% and foreign currency translation of 0.7%.
• Organic revenue was dragged by an 11.6% decline in Covid-19 PCR and antibody testing and partially offset by a 7.9% increase in the clinical laboratory services firm's organic Base Business excluding Covid-19 testing operations.
• Adjusted operating income was $493.5 million (margin of 13.1%) compared to last year's $794 million (margin of 20.4%), reflecting a reduction in Covid-19 testing.
• Adjusted EPS was $3.82, down 37.5% Y/Y and below the consensus estimate of $3.96.
• At the end of the quarter, the company's cash balance and total debt were $400 million and $5.4 billion, respectively. 
• The company said its planned spin of Fortrea, its clinical development business, remains on schedule for mid-2023.
• On April 6, the company announced a quarterly cash dividend of 72 cents per share of common stock, payable on June 8.
• "Labcorp's first quarter results set the foundation for a strong 2023, led by continued industry leadership and strength in our Diagnostics and Central Laboratories, and strong fundamentals in our Early Development Research Laboratories," said Adam Schechter, chairman and CEO of the firm.
• Guidance: For FY23, LabCorp expects overall sales to rise 1.5%-4%, with Covid-19 testing down by 80%-90% and base business sales increasing 9.5%-11%.
• It anticipates adjusted EPS of $16.25-$17.75 compared with $19.94 adjusted EPS in FY22. 
• LH Price Action: LH shares were down 3.22% at $225.02 Tuesday morning.  

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