Labcorp Holdings Inc. (LH Quick QuoteLH - Free Report) reported third-quarter 2026 adjusted earnings per share (EPS) of $4.78, up 14.5% year over year. The metric surpassed the Zacks Consensus Estimate by 2.8%. Organic growth and operating efficiencies supported the bottom-line improvement.

Revenues increased 6.9% to $3.81 billion, exceeding the Zacks Consensus Estimate by 1.1%. Enterprise revenues benefited from 5.5% organic growth and a 1.5% contribution from acquisitions, net of divestitures.

Following the announcement, Labcorp shares rose 1.4% in the pre-market session today.  

LH Reports Growth Across Both Segments

Diagnostics Laboratories (Dx) revenues rose 6.5% to $2.95 billion from $2.77 billion in the prior-year quarter. Organic growth was 4.4%, while acquisitions, net of divestitures, contributed 2.2%. Foreign currency translation had a negative impact of 0.1%.

Total requisition volume increased 4.8%, including 3.1% organic growth and a 1.6% contribution from acquisitions. Price and mix improved 1.7%, with organic price and mix rising 1.3%. These metrics reflect growth in underlying testing activity alongside favorable pricing and service mix.

Biopharma Laboratory Services (BLS) revenues advanced 8.5% to $866.7 million from $799.1 million. Organic growth reached 9.6%, partly offset by a 0.8% reduction from acquisitions, net of divestitures, and a 0.3% foreign exchange headwind. Central Labs revenues climbed 11.5%, while Early Development revenues increased 0.4%.

Labcorp's Margins Expand on Operating Efficiencies

Gross profit increased to $1.11 billion from $1.03 billion a year earlier. Gross margin improved approximately 30 basis points (bps) to 29.1%, as revenue growth outpaced the increase in the cost of revenues.

Adjusted operating income increased to $570 million from $513.3 million. The adjusted operating margin expanded 60 bps to 15%, driven by organic growth and operating efficiencies. Reported operating income rose to $402.1 million from $396.6 million, although the reported operating margin contracted 60 bps to 10.6%.

Labcorp's Cash Flow Strengthens

Labcorp exited the third quarter with cash and cash equivalents of $261.8 million compared with $141.8 million at the end of the second quarter. Total debt was $5.85 billion.

Operating cash flow increased to $563.8 million from $387.2 million a year earlier. Capital expenditures rose to $151.6 million from $106.7 million. Free cash flow improved to $412.2 million from $280.5 million, primarily due to working capital improvements, partially offset by higher planned capital spending.

Labcorp Raises Its 2026 Financial Outlook

The company raised its full-year 2026 enterprise revenue growth guidance to 5.9-6.7% from 5.4-6.3%.The revised revenue outlook of $14.78-$14.89 billion reflects stronger operating performance. The Zacks Consensus Estimate for full-year revenues is pegged at $14.75 billion, implying growth of 5.7%.

Adjusted earnings guidance increased to $18.30-$18.70 per share from the previous projection of $18.10-$18.55. The Zacks Consensus Estimate for the metric is pegged at $18.32.

The company has maintained its free cash flow outlook of $1.24-$1.36 billion for the year.

Labcorp Holdings Inc. Price, Consensus and EPS Surprise

Labcorp Holdings Inc. price-consensus-eps-surprise-chart | Labcorp Holdings Inc. Quote

Our Take

Labcorp exited the third quarter of 2026 with both earnings and revenues beating estimates. Both segments contributed to the quarterly performance. The expansion of gross margin during the quarter is highly encouraging.

The company invested $255.5 million in acquisitions and paid $58.2 million in dividends during the quarter. It also had $1.4 billion remaining under its authorized share repurchase program. LH acquired MLM Medical Labs and subsequently announced agreements to acquire select BioReference Health assets, Myriad Genetics' Prenatal Health testing business and Millennium Health. These transactions are expected to strengthen its specialty testing and laboratory services capabilities. Labcorp also secured FDA approval for its PGDx elio tissue complete CDx companion diagnostic for advanced melanoma. 

Additionally, the raised financial guidance for 2026 bodes well for the stock. 

LH’s Zacks Rank and Key Picks

Labcorp currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks from the broader medical space are Phibro Animal Health (PAHC Quick QuotePAHC - Free Report) , Agilent Technologies (A Quick QuoteA - Free Report) and Globus Medical (GMED Quick QuoteGMED - Free Report) .

Phibro Animal Health, sporting a Zacks Rank #1 (Strong Buy) at present, reported fourth-quarter fiscal 2026 adjusted EPS of 85 cents, which surpassed the Zacks Consensus Estimate by 18.06%. Revenues of $396.7 million beat the Zacks Consensus Estimate by 8.35%. You can see the complete list of today’s Zacks #1 Rank stocks here.

PAHC has an earnings yield of 8.9% compared with the industry’s 2.8%. The company beat earnings estimates in each of the trailing four quarters, the average surprise being 18.36%.

Agilent Technologies, carrying a Zacks Rank #2 (Buy) at present, posted third-quarter fiscal 2026 adjusted EPS of $1.62, which exceeded the Zacks Consensus Estimate by 9.5%. Revenues of $1.88 billion topped the Zacks Consensus Estimate by 2.1%.

A has an earnings yield of 3.7% compared with the industry’s 2.8%. The company’s earnings outpaced estimates in two of the trailing four quarters, missed once and broke even in the other, the average surprise being 3.8%.

Globus Medical, carrying a Zacks Rank #2 at present, posted second-quarter 2026 adjusted EPS of $1.34, which exceeded the Zacks Consensus Estimate by 19.6%. Revenues of $789.6 million outperformed the Zacks Consensus Estimate by 0.4%.

GMED has an estimated earnings yield of 6.6% against the industry’s 2.3% decline. The company’s earnings outpaced estimates in each of the trailing four quarters, the average surprise being 27.9%.