What happened
Laboratory Corporation of America (LH 1.52%), also known as Labcorp, had a Thursday to forget on the stock exchange. The lab services specialist saw its share price tumble by nearly 6% on the day, following the release of a dispiriting set of quarterly results.
So what
Labcorp saw a decline in revenue for its third quarter; this came in at $3.6 billion for the period, down from the year-ago figure of $4.1 billion. Non-GAAP (adjusted) net income also slipped across that stretch of time, landing at $90.7 million ($4.68 per share) versus $97.1 million for the third quarter of 2021.
Compounding that dynamic, the top-line figure didn't meet the average analyst expectation. Collectively, prognosticators following the stock were modeling revenue of $3.8 billion. On a slightly brighter note, those pundits had estimated Labcorp would net a per-share, adjusted net profit of $4.67.
Much of the declines in the company's fundamentals can be chalked up to the coronavirus pandemic. In last year's third quarter, COVID-19 was significantly more of a threat than at present. This led to relatively higher demand for the types of diagnostic and other lab services provided by the company.
NYSE: LH
Key Data Points
Now what
That wasn't the only dynamic dragging down Labcorp's stock in the wake of the earnings release. Investors were also discouraged by a reduction in the company's full-year 2022 guidance.
Labcorp now believes its revenue will decline by 6% to 7.5% this year over 2021; previously it had expected a 2% to 6% drop. The adjusted earnings outlook also got a chop on the high end, with the new range being $19 to $20.25 per share. Formerly the company was estimating $19 to $21.25 per share.
