Labcorp raises 2026 earnings outlook as quarterly revenue reaches US$3.81B

Full-year revenue growth is now expected to reach 5.9 to 6.7 per cent as Labcorp Holdings Inc. NYSELH raised its outlook alongside third-quarter results on Wednesday. The updated forecast lifts the revenue-growth midpoint by 50 basis points.

Labcorp now expects adjusted earnings of US$18.30 to US$18.70 a share for 2026, an increase of US$0.18 at the midpoint. Third-quarter revenue reached US$3.81 billion, compared with US$3.56 billion a year earlier, as organic growth supplied most of the increase.

Labcorp is a large North Carolina-based laboratory-services company providing diagnostic testing and laboratory support for drug development worldwide.

Shares closed at US$331.17 in New York on Oct. 27 at 4:00 p.m. EDT NYSELH. That price predates Wednesday's results and provides no measure of the market's response to the higher forecast.

For the quarter ended Sept. 30, net earnings attributable to Labcorp were US$262.8 million, compared with US$261.1 million a year earlier. Adjusted earnings per share rose to US$4.78 from US$4.18, while reported diluted earnings increased to US$3.22 from US$3.12.

The distinction extends to margins: adjusted operating margin rose to 15.0 per cent from 14.4 per cent. Reported operating margin fell to 10.6 per cent from 11.1 per cent, with adjustments including amortization, impairment, restructuring and special items.

Cash Generation Rises Alongside Capital Spending

Labcorp's Oct. 28 results exhibit puts third-quarter operating cash flow at US$563.8 million, against US$387.2 million a year earlier. After capital expenditure of US$151.6 million, free cash flow was US$412.2 million. The company attributed the improvement in free cash flow primarily to working capital, partly offset by planned increases in capital spending.

At Sept. 30, cash and cash equivalents totalled US$261.8 million, while debt stood at US$5.85 billion. During the quarter, Labcorp invested US$255.5 million in acquisitions and paid US$58.2 million in dividends.

The operating expansion included specialty testing, with the company reporting FDA approval of its tissue-based companion diagnostic for advanced melanoma. Its quarterly update also described broader access to Alzheimer's disease and hepatitis D testing.

"We furthered our leadership in specialty testing by launching innovative tests for advanced melanoma, Alzheimer's disease, and hepatitis D, while expanding access through strategic acquisitions across our Diagnostics and Biopharma Laboratory Services businesses," Labcorp chief executive Adam Schechter said in the release.

Read more: Tempus AI receives European IVDR certification for xR cancer profiling

Quest Also Raises Its Annual Forecast

Quest Diagnostics Incorporated NYSEDGX reported on Oct. 22 that quarterly revenue rose 10.0 per cent to US$3.10 billion. It raised annual adjusted earnings guidance to US$11.25 to US$11.35 a share and increased its operating cash-flow forecast to approximately US$1.90 billion.

Quest's organic requisition volume grew 14.4 per cent, while revenue per requisition fell 4.2 per cent. That split shows why testing activity and revenue growth require separate comparisons; Labcorp reported enterprise organic revenue growth of 5.5 per cent.

The State Street SPDR S&P Health Care Services ETF NYSEARCAXHS was quoted at US$140.98 on Oct. 27 at 8:00 p.m. EDT, providing a sector reference before Labcorp's announcement.

Labcorp's quarterly update also cited a collaboration to expand cervical-cancer screening across clinician- and self-collected options. Distribution and collection access remain areas of investment alongside the laboratory acquisitions.

Read more: Waters Corporation and Quest Diagnostics plan nationwide home HPV screening

Labcorp's next scheduled event is its Oct. 28 earnings call at 9:00 a.m. EDT. Management will discuss the quarter and the higher full-year outlook.