Laboratory Corp. Of America Q1 Profit Tops View; Cuts FY17 Outlook - Quick Facts

(RTTNews) - Laboratory Corp. Of America Holdings (LH) reported Tuesday that first-quarter net earnings attributable to shareholders were $192.2 million, higher than $164.1 million last year.

Earnings per share were $1.84 in the quarter, an increase of 16.5 percent from $1.58 in the same period in 2016.

Adjusted earnings per share were $2.22, compared to $2.05 a year ago.

Net revenue for the quarter was $2.41 billion, an increase of 4.9 percent from $2.30 billion in the first quarter of 2016. The increase in net revenue was due to strong growth in LabCorp Diagnostics.

On average, analysts polled by Thomson Reuters expected earnings of $2.2 per share on revenues of $2.41 billion for the quarter. Analysts' estimates typically exclude special items.

Looking ahead, for fiscal 2017, the company now expects adjusted earnings per share of $9.20 to $9.60, lower than previous estimate of $9.35 to $9.75 per share. The revised outlook reflects an increase of approximately 4 percent to 9 percent as compared to $8.83 in 2016.

Analysts expect earnings of $9.6 per share for the year.

According to the firm, the downward revision in outlook was due to the decline in expected revenue growth.

The company expects full-year net revenue growth of 3.5 percent to 5.5 percent over 2016 net revenue of $9.44 billion, which includes the negative impact from approximately 40 basis points of foreign currency translation and equates to constant currency revenue growth of 3.9 percent to 5.9 percent.

This is 100 basis points lower than the prior guidance of 4.5 percent to 6.5 percent due to a decline in expected revenue growth in Covance Drug Development, partially offset by higher expected revenue growth in LabCorp Diagnostics.

Net revenue growth in LabCorp Diagnostics would be 5 percent to 7 percent, an increase of 50 basis points over the prior guidance of 4.5 percent to 6.5 percent.

Net revenue growth in Covance Drug Development is expected to be 0.0 percent to 2.0 percent, 350 basis points lower than the prior guidance of 3.5 percent to 5.5 percent primarily due to first quarter results, as well as the mix of contracted awards won during the quarter.