Labcorp cuts 2023 profit forecast on drug development spin-off

investing.com:

(Reuters) — Laboratory Corp of America (NYSE:LH) Holdings cut its annual profit forecast on Thursday due to the spin off of the company's drug development business.

Labcorp now expects revenue from core business to grow in the range of 11.3%-12.6% for the year, compared with 9.5%-11% estimated earlier.

COVID testing sales are projected to fall between 85% and 89% this year compared with the previous forecast of 80%-90%, the company said.

The life sciences company now expects to earn between $13 and $14 per share on an adjusted basis this year, compared with its prior forecast of between $16.25 and $17.75 per share. Analysts on average estimate $14.02 per share, according to Refinitiv data.

In April, Labcorp said non-human primates supply issues are projected to negatively impact its second-quarter drug development revenues by $30 million to $40 million.

Rival Quest Diagnostics (NYSE:DGX) beat quarterly profit estimates on Wednesday helped by a rebound in routine test volumes as people returned for regular health checkups which they delayed during the pandemic.

North Carolina-based Labcorp reported a revenue of $699 million from its early-stage drug development business for the quarter ended June 30, lower than the average of three analysts' estimates of $1.24 billion, according to Refinitiv data.

(This story has been corrected to say profit forecast was cut due to the spin off of company's clinical development unit in the headline and paragraph 1, and removes reference to a lab monkey shortage in paragraph 2)