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Will LabCorp's (LH) Coronavirus Test Boost Q1 Earnings?
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Laboratory Corporation of America Holdings (LH - Free Report) , also known as LabCorp, is slated to report first-quarter 2020 results on Apr 29, before market open.
In the last reported quarter, the company’s adjusted earnings exceeded the Zacks Consensus Estimate by 2.14%. The company beat estimates in three of the trailing four quarters, the average positive surprise being 2.21%.
Let's see how things have shaped up for this announcement.
Factors at Play
LabCorp seems well-aligned with its three key strategies — delivering advanced diagnostics, bringing new medicines to patients faster and using technology to improve patient care. However, the stock has been declining like most stocks in the industry since the end of January.
The coronavirus outbreak has massively disrupted global supply chain with several nations imposing lockdowns. LabCorp, which carries out tests on more than 3 million patient specimens per week and supports clinical trial activity in approximately 100 countries globally through its central laboratory business, is expected to have witnessed a significant fall in its quarterly revenues.
Laboratory Corporation of America Holdings Price and EPS Surprise
In addition, since the beginning of February, the healthcare industry all over the globe, started to postpone non-emergency and elective healthcare activities to focus on COVID-19 treatments. LabCorp’s nutritional chemistry and food safety business sales within LabCorp Diagnostics are expected to have significantly reduced in the to-be-reported quarter affected by lower demand. However, the magnitude of this loss is still unclear.
Its developments to support COVID-19 testing are believed to have contributed to the company’s first-quarter performance.
On Mar 5, the company announced the availability of its COVID-19 NAA test. The test effectively detects the presence of the underlying virus causing COVID-19 and is to be used for patients who have symptoms that match the current evaluation guidelines of infection. The test is a qualitative assay using Polymerase chain reaction (PCR) technology. Further, the company also made itself eligible to perform the Centers for Disease Control and Prevention (CDC) 2019-nCoV Real-Time RT-PCR Diagnostic Panel, if needed, to meet higher testing demand.
Later in March, the company announced that it was capable of performing more than 20,000 coronavirus tests per day, a significant increase in its capacity since the release. Per the last update, it was performing tests in three of its largest labs in the country.
Although this test was rolled out in the second half of the to-be-reported quarter, it is likely to have contributed to the company’s global Covance Drug Development business’ quarterly revenues.
In the meantime, LabCorp also dedicated the first hour of service each day at its nearly 2,000 patient service centers (PSCs) across the United States to non-COVID-19 testing needs of critical patients. It also launched the “Wait Where You’re Comfortable” program to enable patients to check in from their mobile device or using the LabCorp Express tablet. These developments are also likely to have added to the company’s first-quarter top line.
Key Q1 Estimates
The Zacks Consensus Estimate for first-quarter earnings of $2.10 implies a 19.9% decline from the year-ago reported figure. The consensus estimate for revenues is pegged at $2.79 billion, suggesting a 0.01% increase from the prior-year reported number.
What the Quantitative Model Suggests
Per our proven model, stocks with the combination of a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold), along with a positive Earnings ESP, have a good chance of beating estimates. This is not the case as you can see:
Earnings ESP: LabCorp has an Earnings ESP of -16.4%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: LabCorp carries a Zacks Rank #3.
Stocks to Consider
Here are a few medical stocks with the right combination of elements to beat on earnings this reporting cycle.
Aphria Inc. carries a Zacks Rank of 2 at present with an Earnings ESP of +35.71%.
DexCom, Inc. (DXCM - Free Report) is a Zacks #2 Ranked stock and has an Earnings ESP of +143.90%.
Today's Best Stocks from Zacks
Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2019, while the S&P 500 gained and impressive +53.6%, five of our strategies returned +65.8%, +97.1%, +118.0%, +175.7% and even +186.7%.
This outperformance has not just been a recent phenomenon. From 2000 – 2019, while the S&P averaged +6.0% per year, our top strategies averaged up to +54.7% per year.
Image: Bigstock
Will LabCorp's (LH) Coronavirus Test Boost Q1 Earnings?
Laboratory Corporation of America Holdings (LH - Free Report) , also known as LabCorp, is slated to report first-quarter 2020 results on Apr 29, before market open.
In the last reported quarter, the company’s adjusted earnings exceeded the Zacks Consensus Estimate by 2.14%. The company beat estimates in three of the trailing four quarters, the average positive surprise being 2.21%.
Let's see how things have shaped up for this announcement.
Factors at Play
LabCorp seems well-aligned with its three key strategies — delivering advanced diagnostics, bringing new medicines to patients faster and using technology to improve patient care. However, the stock has been declining like most stocks in the industry since the end of January.
The coronavirus outbreak has massively disrupted global supply chain with several nations imposing lockdowns. LabCorp, which carries out tests on more than 3 million patient specimens per week and supports clinical trial activity in approximately 100 countries globally through its central laboratory business, is expected to have witnessed a significant fall in its quarterly revenues.
Laboratory Corporation of America Holdings Price and EPS Surprise
Laboratory Corporation of America Holdings price-eps-surprise | Laboratory Corporation of America Holdings Quote
In addition, since the beginning of February, the healthcare industry all over the globe, started to postpone non-emergency and elective healthcare activities to focus on COVID-19 treatments. LabCorp’s nutritional chemistry and food safety business sales within LabCorp Diagnostics are expected to have significantly reduced in the to-be-reported quarter affected by lower demand. However, the magnitude of this loss is still unclear.
Its developments to support COVID-19 testing are believed to have contributed to the company’s first-quarter performance.
On Mar 5, the company announced the availability of its COVID-19 NAA test. The test effectively detects the presence of the underlying virus causing COVID-19 and is to be used for patients who have symptoms that match the current evaluation guidelines of infection. The test is a qualitative assay using Polymerase chain reaction (PCR) technology. Further, the company also made itself eligible to perform the Centers for Disease Control and Prevention (CDC) 2019-nCoV Real-Time RT-PCR Diagnostic Panel, if needed, to meet higher testing demand.
Later in March, the company announced that it was capable of performing more than 20,000 coronavirus tests per day, a significant increase in its capacity since the release. Per the last update, it was performing tests in three of its largest labs in the country.
Although this test was rolled out in the second half of the to-be-reported quarter, it is likely to have contributed to the company’s global Covance Drug Development business’ quarterly revenues.
In the meantime, LabCorp also dedicated the first hour of service each day at its nearly 2,000 patient service centers (PSCs) across the United States to non-COVID-19 testing needs of critical patients. It also launched the “Wait Where You’re Comfortable” program to enable patients to check in from their mobile device or using the LabCorp Express tablet. These developments are also likely to have added to the company’s first-quarter top line.
Key Q1 Estimates
The Zacks Consensus Estimate for first-quarter earnings of $2.10 implies a 19.9% decline from the year-ago reported figure. The consensus estimate for revenues is pegged at $2.79 billion, suggesting a 0.01% increase from the prior-year reported number.
What the Quantitative Model Suggests
Per our proven model, stocks with the combination of a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold), along with a positive Earnings ESP, have a good chance of beating estimates. This is not the case as you can see:
Earnings ESP: LabCorp has an Earnings ESP of -16.4%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: LabCorp carries a Zacks Rank #3.
Stocks to Consider
Here are a few medical stocks with the right combination of elements to beat on earnings this reporting cycle.
Chemed Corporation (CHE - Free Report) currently has a Zacks Rank of 1 and an Earnings ESP of +1.78%. You can see the complete list of today’s Zacks #1 Rank stocks here.
Aphria Inc. carries a Zacks Rank of 2 at present with an Earnings ESP of +35.71%.
DexCom, Inc. (DXCM - Free Report) is a Zacks #2 Ranked stock and has an Earnings ESP of +143.90%.
Today's Best Stocks from Zacks
Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2019, while the S&P 500 gained and impressive +53.6%, five of our strategies returned +65.8%, +97.1%, +118.0%, +175.7% and even +186.7%.
This outperformance has not just been a recent phenomenon. From 2000 – 2019, while the S&P averaged +6.0% per year, our top strategies averaged up to +54.7% per year.
See their latest picks free >>