BURLINGTON – Laboratory Corp. of America Holdings (LH) on Wednesday reported a first-quarter loss of $316.9 million, after reporting a profit in the same period a year earlier and acknowledged formally a series of cost-cutting measures across the life science giant’s holdings.
“The Company is taking numerous actions to help mitigate the financial impact from the COVID-19 pandemic. Some of these actions include reducing our cash outflows through delaying certain capital expenditures, temporarily suspending its share repurchase program, and applying a heightened threshold to acquisition activity,” LabCorp announced in its earnings report.
“The Company is also taking actions regarding its workforce including implementing furloughs; delaying hiring; reducing temporary and contract workers, intern positions, and overtime; suspending discretionary merit adjustment for all employees; and suspending 401(k) contributions for all U.S. employees.
“LabCorp is also taking actions to utilize available stimulus / CARES Act benefits including deferral of payroll taxes, CMS stimulus to providers, and suspension of Medicare sequestration.”
The cost-cutting moves were first reported last week by WRAL TechWire. Exact numbers of affected employees by the job cuts were not disclosed. However, “We are not planning large-scale employee reductions,” LabCorp’s CEO Adam Schechter said in a letter last week to employees.
The financials
On a per-share basis, the Burlington-based company which employs thousands of people across the state said it had a loss of $3.27. Earnings, adjusted for one-time gains and costs, came to $2.37 per share.
The results topped Wall Street expectations. The average estimate of four analysts surveyed by Zacks Investment Research was for earnings of $1.76 per share.
LabCorp CEO: Expense cuts may include furloughs, hiring slowdown, some job cuts
“During the quarter we delivered solid performance across the company, especially considering the challenges associated with the COVID-19 pandemic,” said Adam Schechter in a statement.
“Looking forward, despite the unpredictability of this health crisis, we are well positioned financially and strategically to continue to serve our customers and drive long-term shareholder value. We stand ready to serve and support patients, and we will continue to do everything we can, as quickly as possible, to support the global response.”
The medical laboratory operator posted revenue of $2.82 billion in the period, also surpassing Street forecasts. Four analysts surveyed by Zacks expected $2.72 billion.
LabCorp shares have increased 4% since the beginning of the year, while the Standard & Poor’s 500 index has fallen 11%. The stock has risen 14% in the last 12 months.
