Laboratory Corporation of America Holdings (LH), a leading global life sciences company, has reported its first-quarter 2024 financial results, showcasing strong top-line performance and raising its full-year guidance. The company's diversified business model, strategic acquisitions, and continued focus on innovation have positioned it for sustained growth.
Financials
In the first quarter of 2024, Labcorp reported revenues of $3,176.6 million, a 4.6% increase from the same period in 2023. The company's net income for the quarter was $228.0 million, with earnings per share of $2.69. Labcorp's annual net income for 2023 was $418.0 million, and its annual revenue was $12,161.6 million. The company's annual operating cash flow was $1,327.7 million, and its annual free cash flow was $874.1 million.
Segment Performance
Labcorp's Diagnostic Laboratories (Dx) segment reported revenues of $2,479.7 million in the first quarter, a 4.1% increase year-over-year. The Biopharma Laboratory Services (BLS) segment, formerly known as the Drug Development segment, generated revenues of $710.9 million, a 7.5% increase compared to the same period in 2023.
The Dx segment's growth was driven by a 4.3% increase in the Base Business, partially offset by a 2.5% decrease in COVID-19 testing revenue. The BLS segment's growth was fueled by a 13% increase in Central Laboratories, partially offset by a 4% decline in Early Development research laboratories.
Labcorp's adjusted operating income for the first quarter was $453.0 million, or 14.3% of revenue, compared to $448.0 million, or 14.7% of revenue, in the same period last year. The company's adjusted earnings per share for the quarter were $3.68, up 7% from the prior-year period.
Geographic Breakdown
The company's geographic breakdown shows that revenues in the U.S. were $2,654.6 million (83.6%) in the first quarter of 2024, compared to $2,557.4 million (84.2%) in the same period of 2023. Revenues from outside the U.S. accounted for 16.4% of total revenues in the first quarter of 2024, up from 15.8% in the first quarter of 2023.
Liquidity
Labcorp's liquidity position remains strong, with $99.3 million in cash and cash equivalents as of March 31, 2024, and $957.6 million in available borrowings under its revolving credit facility. The company's leverage ratio, as measured by gross debt to trailing 12-month adjusted EBITDA, was 2.5x at the end of the first quarter.
Recent Developments
During the quarter, Labcorp made several strategic acquisitions, including the clinical and outreach businesses of Baystate Medical Center, Providence Medical Foundation, and Westpac Labs, Inc. These acquisitions are expected to contribute to the company's growth and strengthen its position in key markets.
The company also announced its intention to create a new holding company, Labcorp Holdings Inc., to more closely align with its brand and better position it as a global organization. This move is part of Labcorp's ongoing efforts to optimize its corporate structure and enhance its operational efficiency.
Outlook
Looking ahead, Labcorp has raised its full-year 2024 guidance. The company now expects enterprise revenue to grow between 4.8% and 6.4% compared to 2023, with Diagnostics revenue expected to increase between 4.8% and 6% and Biopharma revenue projected to grow between 3.7% and 5.7%. The company's adjusted earnings per share guidance range is $14.45 to $15.35, with the midpoint increased by $0.05 due to improved performance in the Diagnostics segment, partially offset by the impact of foreign currency exchange rates.
Conclusion
Labcorp's strong first-quarter results, strategic acquisitions, and raised full-year guidance demonstrate the company's ability to navigate the evolving healthcare landscape and capitalize on emerging opportunities. With its diversified business model, focus on innovation, and commitment to operational excellence, Labcorp is well-positioned to continue delivering value for its shareholders.