Labcorp cuts growth outlook for research unit as biotech funding crunch persists

Core Insights - Labcorp forecasts lower annual revenue growth for its contract research unit due to a prolonged funding crunch affecting early-stage drug development clients [1][4] - The company raised its annual profit forecast and reported better-than-expected third-quarter earnings, but shares fell 5.8% due to ongoing pressures in the contract research unit [2][4] Revenue Growth Projections - The contract research unit is expected to grow by 5.7% to 7.1% this year, down from a prior range of 6.1% to 7.5% [4] - Full-year revenue growth forecast has been trimmed to 7.4% to 8%, from a previous estimate of 7.5% to 8.6% [5] Financial Performance - For Q3, Labcorp reported adjusted earnings of $4.18 per share, exceeding analysts' consensus estimate of $4.13 [6] - The company expects adjusted profit for 2025 to be between $16.15 and $16.50 per share, an increase from the previous range of $16.05 to $16.50 [5] Market Context - The early development business contributes less than 6% to Labcorp's overall revenue, indicating that the impact of its weakness may be overstated [3] - The funding crunch has led to reduced spending from biotech clients over the past two years, with expectations for improvement being dampened by policy uncertainty [1][4]