Having rebounded from the cost of both acquiring Covance and a corporate restructuring, Laboratory Corporation of America Holdings Tuesday reported a jump in its second-quarter earnings.
The major clinical lab provider located in Burlington, N.C. reported $168.4 million in profit for the three months ended June 30, up 19.2% from the same period in 2014. LabCorp did not report total net earnings on a pro forma basis, so the results are largely influenced by the February acquisition of Covance.
That deal plus a corporate restructuring and its Project Launchpad cost-cutting initiative contributed to a nearly 100% drop in earnings last quarter.
LabCorp is on track to deliver about $50 million in net savings in 2015 thanks to improvements put in place through the program.
Second-quarter revenue was up 46% to $2.2 billion, mostly from the acquisition, while organic revenue growth, excluding fluctuations in currency, was about 5.4%.
Covance contributed about $620.8 million in revenue during the quarter, and the remainder stemmed from strong organic volume growth and acquisitions of companies merged with other LabCorp divisions. Revenue from Beacon Laboratory Benefit Solutions, a LabCorp subsidiary offering point-of-care decision support software, also boosted results, by about 1.1%.
On a six-month basis, income dropped about 33.3% to $169.7 million, mostly through restructuring charges of about $214.4 million. The company reported about $4 billion in revenue, up 35.4% from the year before, almost entirely due to the acquisition, with organic volume growth and acquisitions of companies merged with other LabCorp divisions contributing 5.3% growth.
LabCorp CEO David King said during a conference call Tuesday that the company continues to be in the acquisitions market, looking to broaden its esoteric testing business, which analyzes rare or niche assays, and its overall geographic footprint. Following the Covance acquisition, the company continues to look for other drug development firms that can complement its existing offerings or support development, he said.