First Half of Year Yields Earnings Growth for LabCorp, Quest

LabCorp and Quest Diagnostics reported significant jumps in profitability during the second quarter of 2016 and throughout the first half of the year.

North Carolina-based LabCorp, the larger of the two entities, reported net income of $198.5 million on revenue of $2.43 billion for the quarter ending June 30. That compares to a net of $170.1 million on revenue of $2.2 billion for the second quarter of 2015. Earnings per share were $2.31, which beat estimates by a penny. LabCorp’s diagnostics division saw revenue grow 5.4 percent, to $1.66 billion. Test volumes grew 2.1 percent. Covance performed even better, up 12.2 percent to $722.4 million. Organic growth of business was an impressive 6.4 percent compared to a year ago, across both the LabCorp and Covance books of business.

Meanwhile, New Jersey-based Quest Diagnostics also posted a healthy second quarter, even though growth was flat. It reported net income of $209 million on revenue of $1.9 billion, compared to net income of $129 million on revenue of $1.93 billion for the year-ago quarter. The company said revenue was flat primarily due to divestitures so it could focus on diagnostic information services. Quest reaped $34 million in after-tax profit for the sale of its Focus Diagnostics division during the quarter. Earnings per share were $1.34, which beat estimates by two cents. Revenue from Quest’s diagnostic information services revenues grew 2.2 percent, while test volumes grew 1.9 percent compared to the year-ago quarter. For the first six months of 2016, Quest reported net income of $324 million on revenue of $3.8 billion, compared to net income of $199 million on revenue of $3.8 billion for the first half of 2015.

For further discussion of the earnings reports for Lab Corp and Quest for the first half of the year, see the Sept. 1, 2016 issue of Laboratory Industry Report.