Laboratory Corp. of America Holdings Beats Analyst Estimates on EPS

Seth Jayson, The Motley Fool
Updated

Laboratory Corp. of America Holdings (NYS: LH) reported earnings on Feb. 10. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Dec. 31 (Q4), Laboratory Corp. of America Holdings met expectations on revenues and beat expectations on earnings per share.

Compared to the prior-year quarter, revenue expanded and GAAP earnings per share improved.

Margins dropped across the board.

Revenue details
Laboratory Corp. of America Holdings reported revenue of $1.37 billion. The 21 analysts polled by S&P Capital IQ predicted a top line of $1.38 billion on the same basis. GAAP reported sales were 5.5% higher than the prior-year quarter's $1.30 billion.

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Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
Non-GAAP EPS came in at $1.43. The 15 earnings estimates compiled by S&P Capital IQ predicted $1.40 per share on the same basis. GAAP EPS of $1.34 for Q4 were 7.2% higher than the prior-year quarter's $1.25 per share.

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Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 40.2%, 70 basis points worse than the prior-year quarter. Operating margin was 18.9%, 60 basis points worse than the prior-year quarter. Net margin was 9.9%, 30 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $1.41 billion. On the bottom line, the average EPS estimate is $1.57.

Next year's average estimate for revenue is $5.73 billion. The average EPS estimate is $6.52.

Investor sentiment
The stock has a five-star rating (out of five) at Motley Fool CAPS, with 684 members out of 702 rating the stock outperform, and 19 members rating it underperform. Among 240 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 238 give Laboratory Corp. of America Holdings a green thumbs-up, and two give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Laboratory Corp. of America Holdings is hold, with an average price target of $93.23.

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At the time thisarticle was published Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor ofMotley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Motley Fool newsletter services have recommended buying shares of Laboratory of America Holdings. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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