Laboratory Corp. of America Holdings, the provider of more than 4,000 clinical tests, plunged the most in almost seven years after the company issued 2014 forecasts that disappointed investors.
LabCorp dropped 11 percent to $88.25 at the close in New for the shares’ biggest decline since March 2007. The stock of the Burlington, North Carolina-based company has increased 1.9 percent this year.
Profit may be about $6.50 a share next year on revenue growth of 2 percent, LabCorp said yesterday in a statement. A “challenging operating environment will continue” to hurt results, said the company, which also noted “uncertainty” related to the implementation of the Patient Protection and Affordable Care Act. Analysts had estimated earnings of $7.52, on average, according to Canaccord Genuity. (CF)
“LabCorp called out utilization pressures, reimbursement pressures, ACA uncertainty and an uptick in high-deductible health plans,” Jeffrey Frelick, an analyst with Canaccord, wrote in a research note today. He downgraded his rating of LabCorp shares to “hold.”
“At first glance, the guidance looks excessively pessimistic relative to reality,” Frelick wrote. “Given LabCorp’s position as the low-cost lab provider, we thought they could endure the market challenges the best, but we miscalculated.”
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