Labcorp Q1 Earnings Preview: Diagnostics Arm Likely to Drive Growth

Core Viewpoint - Labcorp Holdings Inc. is expected to report its first-quarter 2025 results on April 29, with positive revenue and earnings estimates indicating growth compared to the previous year [1][2]. Q1 Estimates - The Zacks Consensus Estimate for Labcorp's first-quarter 2025 revenues is $3.42 billion, reflecting a 7.6% increase from the prior year [1]. - The expected EPS for the first quarter of 2025 is $3.74, which is a 1.6% improvement [2]. Estimate Revision Trend - Earnings estimates for Labcorp's first-quarter have decreased by 1 cent to $3.74 in the past week [3]. Factors at Play Diagnostics Laboratories (Dx) - The Dx segment is anticipated to maintain strong momentum due to organic growth and acquisitions, with a projected 8.4% year-over-year revenue increase [4][7]. - Recent partnerships and laboratory expansions, including collaboration with Inspira Health and the acquisition of Lab Works assets, are expected to significantly boost revenues [5][6]. Biopharma Laboratory Services (BLS) - The BLS segment is likely to benefit from the strength in Central Laboratories, with a projected 7.6% year-over-year revenue improvement [8][11]. - Enhanced digital solutions and strong customer adoption of Labcorp Diagnostics Assistant are expected to contribute positively to revenues [9][10]. Operational Performance - Both Dx and BLS segments are expected to see improved margins, aided by cost management initiatives that achieved annual savings of $100-$125 million [12]. - The adjusted operating income for the Dx business is estimated to increase by 4.3%, while the BLS arm is projected to see a 9% improvement year-over-year [12].