Labcorp Raises Outlook as Margins Widen
The laboratory-services company lifted its 2026 adjusted earnings midpoint by 30 cents to $18.325 a share.
Labcorp Holdings (LH), a provider of diagnostic and biopharma laboratory services, raised its full-year outlook after second-quarter profit increased and operating margins expanded.
Revenue rose 5.8% from a year earlier to $3.731 billion, including 4.2% organic growth. GAAP diluted earnings increased 28.5% to $3.64 a share, while adjusted earnings rose 14.9% to $4.99 a share.
The company’s operating margin widened 90 basis points to 12.1%, and its adjusted operating margin expanded 70 basis points to 15.8%. This improvement was driven by organic growth and operating efficiencies.
Diagnostics Laboratories revenue increased 5.5% to $2.901 billion as higher prices and test mix combined with increased volume. The segment’s adjusted operating margin reached 18.0%, while adjusted operating income rose to $522.6 million from $482.8 million.
Biopharma Laboratory Services revenue grew 6.5% to $836.2 million, led by 9.8% growth in Central Labs as Early Development revenue declined 1.4%. The segment’s adjusted operating margin expanded 130 basis points to 17.0%, and adjusted operating income increased to $142.2 million. Trailing-12-month net orders totaled $3.32 billion, with a book-to-bill ratio of 1.03 and backlog little changed at $8.73 billion.
Labcorp now expects 2026 revenue of $14.710 billion to $14.827 billion, up from its previous range of $14.649 billion to $14.803 billion. The largest revision came in Biopharma Laboratory Services, where the company now projects revenue growth of 5.5% to 6.5%, compared with 3.8% to 5.4% previously.
The company maintained its free-cash-flow forecast of $1.240 billion to $1.360 billion even as quarterly free cash flow fell to $313.9 million from $542.7 million because of working-capital timing and planned capital-spending increases. Labcorp also added $1.0 billion to its share-repurchase authorization, leaving $1.4 billion available, as it expanded cancer-testing offerings and introduced new consumer screening products.