Labcorp misses profit estimates as drug development unit struggles

Laboratory of America Holdings

25/04/2023 14:23

April 25 (Reuters) - Laboratory Corp of America Holdings
 LH.N  missed estimates for quarterly profit on Tuesday, as its
drug development unit struggled against curbs on animal imports,
while a sharp fall in sales of COVID testing kits hurt its
diagnostics business.
    Contract research firms, which conduct drug
development-related work for third parties, have been hit by
constraints over the supply of non-human primates (NHP) after a
Cambodian supplier was charged in connection with illegal
imports into the United States. 
    The company had earlier this year estimated a hit to its
revenue from supply issues of between $80 million and $100
million.
    The North Carolina-based life sciences company reported $1.4
billion in revenue from its drug development business for the
quarter ended March 31, compared with analysts' estimate of
$1.45 billion, according to Refinitiv IBES data.
    Excluding items, Labcorp reported a profit of $3.82 per
share in the quarter, below analysts' average estimate of $3.96,
according to Refinitiv data.  
    Its revenue dropped to $3.8 billion from $3.9 billion a year
earlier. 
    Labcorp now expects revenue from core business to grow in
the range of 9.5-11% for the year, compared with 8.5-10.5%
growth estimated earlier. 
    COVID testing for the year is expected to fall between
80-90% from its previous estimate of 75-90%, the company said.
    Labcorp now expects 2023 profit of $16.25 to $17.75 per
share, compared with $16 to $18 per share estimated earlier.
    The planned spinoff of clinical development business Fortrea
remains on schedule for mid-2023, it added.
 
    

 (Reporting by Mariam E Sunny in Bengaluru; Editing by Shweta
Agarwal)
 ((Mariam.ESunny@thomsonreuters.com))