LabCorp: Reimbursement cuts will dim 2013
Much like fellow giant Quest Diagnostics ($DGX), LabCorp ($LH) is expecting to suffer from Medicare payment reductions this year, predicting to lose about 35 cents per share to a decline in reimbursement.
The company still expects between 2% and 3% revenue growth on the year, in line with 2012's 2.3% jump over the previous year. And despite slumping for most of the year, LabCorp's testing volume ticked upward last quarter, rising 2.8% to fill out $1.4 billion in Q4 sales.
LabCorp is in the process of restructuring to stay profitable, shedding jobs and taking $20.7 million in related charges last quarter. Furthermore, LabCorp authorized a $1 billion share buyback program, all part of its efforts to slim down and adapt to a changing market, CEO David King said.
"We had a good year, despite operating through a challenging environment, and achieved meaningful progress on our 5-pillar strategy," King said in a statement. Those pillars: Spend money on shares and new tests, boost IT capabilities, improve efficiency, be wise with R&D investments and implement alternative delivery models.
LabCorp isn't the only testing outfit facing a Medicare squeeze. Last month, Quest announced 2013 projections that fell below analyst estimates, saying reimbursement cuts would trim testing revenue by about 3% this year and continue marring profits through 2015.
- read LabCorp's results