(Reuters) – Laboratory Corporation of America on Thursday forecast 2024 profit above Wall Street expectations and beat fourth-quarter profit estimates, as resilient demand for routine test kits boosted sales in its diagnostics business.
The United States has seen more people, especially older adults, catching up on medical procedures and routine checkups that were deferred due to pandemic-driven curbs.
The increased medical care utilization has benefited U.S. lab testing companies, including Labcorp’s rival Quest Diagnostics, which forecast strong 2024 sales, betting on demand for diagnostic kits.
Labcorp is the second-largest independent lab testing service provider and one of the main providers of contract research services in the United States.
Its diagnostics unit – the biggest unit by revenue – generated sales of $2.35 billion in the quarter ended Dec.31, up 2.6% from a year ago.
The company had last month said that routine testings have returned to pre-pandemic volumes and that there is even a “bit of an acceleration” from those levels.
Labcorp had forecast the diagnostics business to grow about 2.5% to 4.5% over the next three years.
It now expects to earn between $14.30 and $15.40 per share on an adjusted basis in 2024, compared with the analysts’ average estimate of $14.60, according to LSEG data.
Total sales came in at $3.03 billion, largely in line with analysts’ expectations.
Labcorp expects 2024 total enterprise revenue to grow in the range of 4.7% to 6.5%. On an adjusted basis, it earned $3.30 per share, topping estimates of $3.26.
(Reporting by Mariam Sunny in Bengaluru; Editing by Pooja Desai and Arun Koyyur)
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