Laboratory Corp Revenue and Profit Rise

Medical-testing company Laboratory Corp. of America Holdings said it posted revenue and profit growth in its latest quarter as acquisitions continue to bolster results.

LabCorp also said Wednesday that it was buying prenatal testing company Sequenom Inc. for about $2.40 a share, in a deal worth about $302 million. Shares of Sequenom rose to $2.39 in premarket trading, up from a closing price of 85 cents Tuesday.

The diagnostic company raised the lower ends of both its revenue and profit guidance for the year. It now expects annual revenue growth of 9.5% to 10.5%, compared with 8.5% to 10.5% previously. It raised the low end of its earnings-per-share guidance by five cents, now expecting adjusted earnings per share of between $8.60 and $8.95.

The Burlington, N.C.-based company has benefited from a string of acquisitions, including its roughly $6 billion tie-up last year with Covance, a provider of outsourced research-and-development services. During the most recent quarter, Covance brought in $722.4 million in revenue, up 12.2% from the year prior. Revenue in its diagnostics segment unit grew 5.4% to $1.66 billion.

LabCorp said organic revenue rose 6.4% during the period due to increases in price, mix and tuck-in acquisitions.

For the quarter, LabCorp earned $198.2 million, up from $169.8 million in the year-ago quarter. On a per-share basis, earnings grew to $1.91 from $1.66 amid a higher share count. Excluding special items, adjusted earnings per share were $2.31.

Revenue increased 7.4% to $2.38 billion.

Analysts had projected $2.30 in per-share earnings on $2.33 billion in revenue, according to Thomson Reuters.

Write to Austen Hufford at austen.hufford@wsj.com

(END) Dow Jones Newswires

July 27, 2016 09:45 ET (13:45 GMT)

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