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UPDATE 4-LabCorp says 2013 will be tough, cuts 2012 outlook
2012年10月18日 / 中午11点39分 / 5 年前

UPDATE 4-LabCorp says 2013 will be tough, cuts 2012 outlook

* CEO cites tough environment
    * 2012 growth seen at 2.5 percent
    * Shares fall 3 percent

    By Caroline Humer
    Oct 18 (Reuters) - Laboratory Corp of America Holdings
 said on Thursday it expects 2013 to be a difficult year
as government payments for medical testing services decline and
hospitals continue to take more testing in house.
    The volume of medical tests has fallen at LabCorp and its
main competitor Quest Diagnostics as the U.S. government,
insurers, corporations and consumers increasingly question which
tests are absolutely necessary. 
    Also, as healthcare reform takes hold, hospitals are buying
physician groups, which then order tests done in house, also
hurting the lab companies.
    LabCorp's view of the environment underscored Quest's report
on Wednesday, which also painted a difficult picture.
    LacCorp lowered its growth forecast for 2012 revenues to 2.5
percent from a range of 2 percent to 3 percent. The new outlook
also includes a 1 percent gain from growth in its newly
purchased Medtox testing business, which does specialized tests.
    LabCorp, whose shares fell 3 percent in morning trading,
said that it does not see a return to the 4 percent to 6 percent
growth for which the industry was once known. 
    "Given a very tough economic environment and tough
utilization environment and a lot of pressure to reduce costs,
we are struggling to grow, as are all healthcare businesses
frankly," Chief Executive Officer David King said during a
conference call with analysts on Thursday.
    In 2014 and beyond, growth should improve, he said.
    King also said that if the U.S. government goes ahead with a
2 percent across-the-board plan to slash spending to tackle the
deficit and other slated government funding cuts come to pass,
the company's 22 cents per share in earnings in 2013 was in
danger. But, he emphasized that it is not yet known if those
"fiscal cliff" related cuts will come through.
    The company's third-quarter came in slightly better than
expected on an adjusted basis. Net earnings rose to $148.0
million, or $1.53 per share, in the third quarter from $134.3
million, or $1.31 per share, a year earlier.
    Excluding special items, the company earned $1.76 per share.
Analysts on average had expected $1.74, according to Thomson
Reuters I/B/E/S.
    The company said it now expected adjusted earnings of $6.88
to $6.93 per share for the year. Last quarter it trimmed five
cents off the top end and said that range would be $6.80 to
$7.00 per share.  
    Wells Fargo analyst Gary Lieberman said that the LabCorp
results were mixed and that better-than-expected earnings per
share figure was likely largely related to the company's tax
    In addition, he said the stock may have fallen because the
operating income had been weaker than expected. The company's
disclosure during the conference call that its outlook for a 2.5
percent revenue growth rate in 2012 would have been 1.5 percent
excluding its recent acquisition may also have weighed on
shares, Lieberman said.   
    The news comes one day after competitor Quest Diagnostics
Inc reported mixed results that drove down its shares.
    LabCorp was off 2.6 percent, or $2.31, at $87.90 at midday
on Thursday while Quest gained 61 cents to $60.36, both on the
New York Stock Exchange.

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