LH - Earnings call transcript Q2 2021 | Laboratory Corporation of America Holdings

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Ladies and gentlemen, thank you for standing by, and welcome to the Labcorp Second Quarter 2021 Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. [Operator instructions] I'd now like to hand the conference over to your host today, Chas Cook, Vice President, Investor Relations. Please go ahead.

Chas Cook

Thank you, operator. to quarter welcome conference and morning, Labcorp's XXXX second call. Good

our With there in available a release with Internet. Glenn Adam website to Eisenberg, today's Investor Chief Officer; detailed President Officer. Chief will www.labcorp.com, discussed Chairman we via non-GAAP on press of additional our presentation Relations today and our the at Schechter, today's press and during include and and Executive section the call As and which conference Investor This release, be Relations both morning Executive the in are of measures this operations, a business replay information posted telephone call. GAAP reconciliation and Vice financial me Financial of measures in financial

These COVID-XX our projected are and statements pandemic COVID-XX is of limited to the responses of affect business of many change our future our that forward-looking financial generally making upon beyond Each control are not respect statements. business condition, based expected financial the statements market our guidance pandemic to estimated on cash and the XXXX businesses, we our could general our of and impacts including economic, as well but and impact forward-looking is to, the assumptions, statements operating factors, include, various with the current conditions. more expectations results, upon as to on based subject company's which flows are the and/or on related forward-looking the Additionally, results.

the other subsequent XX-Q report SEC. forth recent quarterly filings on and with in XX-K these detail company's of the in in annual set Form Some reports and on most are Form factors our

any updates our forward-looking obligation no even to if these have We to expectations change. statements provide

I'll the Adam call over turn Schechter. Now to

Adam Schechter

the committed providers improving and advance good development and technology around morning, To improve was totalled performance mission pleasure growth in meeting drug and end, remains diagnostics our outlook of in the from result same world. second and will in increase diagnostics driven for using guidance forefront flow. new in morning. million the patients, shareholders. you EPS with versus this the and base reached XX% improved cash at strength $XXX to was XXXX period the and do Glenn quarter of to and health $X.XX Free EPS We that businesses. our for Chas and Adjusted XXXX. from year in a $X.XX science quarter of drug XXXX. across capabilities Most the a It's this the to in be development. the was Revenue Innovation, to you in cash versus strong prior the a review very moment. strong million with the everyone. us The continued billion $X.X full guidance remain year. extensive year flow you, revenue, $XXX Thank both and will the by lives always quarter

to note, the research the On role fight strength drug for performance were and X.XX. development recover book-to-bill pace at and expected. Our even and checkups play base at XX% provider important and COVID. our routine to development than substantial to activities XX business collective against The respectively. pharmaceutical the their month an scale in organization's and This trailing to a resuming drug XX% patients clients continued and returning strong faster that pandemic, company's allowed remained response healthcare continues diagnostics was have

the quarter, ready remains around with we can wherever decline month an test and earlier In has Labcorp day. June since date an in as decrease the To been COVID cases of of world. drove vigilant made, positive pandemic. clear Although PCR the we a lower over that average. US per XX,XXX stands progress overall was to testing quarter lot COVID a still there has steady test. of do the performed The it million in in XX the stage is than is of and to have Labcorp help much work however and

recent However, testing started to increase again weeks. in

We continue this the to variant vaccines and contract other PCR areas COVID Delta individuals is swell remainder and continue continue development enter year in the for involved It to on exactly Therefore, the States testing access To scale like in the treatments net and we time, capacity of the world. many quickly around difficult we studies our ability expand to will communities exceeds we [ph] and our an CDC At developments season. drug quarter test from need. positive to teams our to potential the support what and samples. for monitor watching same world are testing flu for monitoring be the to the in the to and the as and around tracking Delta United extension maintain look announced COVID and predict closely. provide in variants, demand will

state vaccination partnerships awareness US of Middle access is to Our This which facilitate in us test to raise COVID-related to study and allow and Department production over our mass programs up kit and included antibody Health will expand like we investigators at-home Carolina Belgium new Africa. will this of clinical to levels, production places the double Other pharmaceutical time. running automated clients North capacity for in and underserved our and actions in quarter Europe, facility collaboration selections at populations. East trial Human automated Massachusetts therapies expanded the Services and local better kit with the serve monoclonal and notable

Pixel with services in X,XXX delivery Walgreens. now stores continue through and addition, on-demand In test available Walgreen the [indiscernible]. bilateral kits collaboration we like are

through infrastructure In the the immune work largest response. body's Importantly, our the infection to studies the our nature COVID-related time, useful of we one of the data quarter, contribute on analysed of result scientists XX,XXX patients. available natural use about more essential the to research. we to which testing its released reaction detail robust as test than of more learn of offers This to the

memory. clinical analysis this intended our the and in normalize are and serology of [ph] T also people of to activities. of upon proud to set progress extending including contributions are testing treatment We cell to We significant development assist to building and all work and which go our remain semi of vaccines, portfolio safely back

Now I'll experiences and customer We our our focused We're leveraging across healthcare. integrate industry-leading on retention enhance focus provide data and customer to and drive updates see advance to growth, science strategy. positions and digitalization business. our

and elevating centers, through to to of using in week, faster we rolling a including development feeds. omni a channels. state-of-the-art to cancers. test to by month. the The and continue last in our potential As sequencing On XX% improve enhance through profile advanced decision solid to patient options focusing the that an of made professionals Asia. specific in part launched experience we're XX multidisciplinary led United create oncology, scheduling we turnaround adoption client's a several for significant with molecular our is In highly add bio-analytical oncology States clinical as our our medical offering Singapore in application million delivery. provides our seamless journey half cancer In tumor of health experience website most times our and that support over eligibility their plan expanding With our increase for identify given result average now excited quarter test enhanced laboratory experience trials. XXX,XXX immune year, patients as per individual's global service strides of objective, identify we digital appropriate insight, patient's our efforts the from well patients the served treatment critical totalled approximately in patients oncology that for trained first of three tests digital uses the We year users million drug to of front a new

cancer to test for helps medicine. benefit a identify This are eligible launched also developed promoting option who lung for who We the treatment patients companion personalized identify non-small important from may Amgen. cell with treatment task new patients physicians precision diagnostic

we Our and partner continue business oncology [indiscernible] solid itself tumor ecosystem work grow. has meaningful presented in important enhance a to An that will oncology at time long a the pioneer relationships opportunity across and created profiling. in healthcare

recently acquire [ph] enhances stake extensive open integrated expanding door the the our oncology Labcorp' more Omni trials. portfolio in platform, remaining today, to the company. As s we participation in patient to announced option clinical our and oncology exercised diagnostic testing

will We strengthen RA We of opportunities. our continue will to Genetics This by in high concentrate Vectra autoimmune impact on States United identifying Marriott and announced XX% including we position engaging CDC unit in assay. roughly rheumatoid adults the XXXX. for predicts the with business the growth provide

Health and this week of to Minnesota-based business increase acquired agreed management to its we outreach services provide lab. to will Memorial Additionally, laboratory North

there believe we and robust forward. our to this is target investment business and moving acquisition growth of enhance opportunities pipeline in Our development strategy meaningful year

review sharing I structure Labcorp's on allocation year. March to and the of and our briefly in this ongoing to board with and review won't advisors, we capital Working unlock want we're Though of conclusions today, continuing Labcorp to strategy announced we Finally, the touch forward closely progress making is identify that the management our the to our team's around to we shareholder position while once forward our support path value customers best to complete. look patients updates have world. further

mission was we to and and We of us the Significant achieved In both stem drug our and business. our world can. about in we strong their efforts tireless strategy and conclusion, before optimistic diagnostics and for will growth support maintaining our do however to quarter. opportunities and the also colleagues very am our while to so quarter COVID of our want help lives to continue all to improve businesses. improve people success. efforts the health was thank underlying fourth the the I expect around on across strategy our focus on COVID continued stem world I progress future development around to

over to performance. of Now I'll our second details to call the review quarter turn more Glenn

Glenn Eisenberg

an full-year of of currency of XX.X% I and was each acquisitions our points. XX.X%, organic with Thank start of my on review over by going guidance. am comments in to growth you, to performance year our $X.X Revenue with favourable our last an a a quarter second quarter results translation for of basis update segment foreign followed conclude discussion billion X.X% of Adam. the due and increase XXX

revenues last base revenue. of while flat million business million testing year, base $XXX or Operating were $XXX organic increased the quarter with was Our last our income XX.X% year. COVID when for to compared business of XX.X%

charges quarter, and restructuring $XX During of $XX amortization million had we the of and special items. million

compared adjusted organic income year. business offset million was these revenue growth, cost. Excluding $XXX million or base operating partially primarily XX.X% and of $XXX income acquisitions to or increase by quarter and items, was in savings, to personnel launch margin adjusted operating higher XX.X% The in last the due pad

$XX was the last in in year. costs senior XXXX, to from up associated expense interest advantage taking mature million one-time of million were $X to refinancing historically due During $XX the quarter, was the notes due second interest with environment. that rate low The company's increase million of

have interest compared to the rate. earnings. last and Excluding to charges, would last XX.X% these of adjusted items year. interest primarily The $X the The one-time was rate higher the rate tax been million special cost, tax adjusted and lower quarter mix to due excluding amortization year XX.X%, due expense levels tax for restructuring geographic XX.X% versus debt was down rate was

restructuring offset items was The due to cash to our XX%. or quarter $X.XX Operating was favourable earnings. amortization X.X% lower flow €XXX million be Capital quarter by Adjusted operating share. totaled expect from compared working flow to $XXX million per in last increase tax or year diluted ago. approximately earnings cash $XXX revenue rate million We X.X% which year. revenue year. $XX special last for in full were compared charges the EPS, cash $X.XX up in the partially continue $X.XX million to quarter year exclude or $XX of were to the and of million capital, expenditures adjusted Net a

a free $XXX cash As the last flow result million to year. in quarter compared was million $XXX

$XXX of million cash our flow share for we During program. the used repurchase our quarter

XX.X% favourable while by compared and base for billion, due increase organic volume the was Relative year X.X% the the exchange increase versus year, of last to Revenue base partially a second business annual review to an growth Now for of Total year. due a to performance to last of was our of increase XX.X%, was XX acquisitions base X.X%. year organic to volume foreign beginning translation offset basis XX.X% were of business last XXXX, flat Organic business, X.X% to volume growth XX.X% The segment diagnostics. compound growth in reduction points. of due quarter compared growth. in testing I'll testing of to revenues quarter COVID base in XX.X%. the organic increased rate COVID the business XX.X% $X.X over organic primarily with was revenue last growth due primarily our

reminder base business testing hospital offset of agreements last volume management include X.X% a increased of not volume, organic to minus X.X%, volume X.X% due Price COVID over business mix of do of in base which year, partially As mix acquisitions due to associated have X.X%, X.X% by added with would lab to and we our organic the X.X% recovery. currency approximately growth.

to by offset second to personnel margins [indiscernible]. to track first million were partially quarter XX.X% to business while the of this year base base X.X% in from due of end Diagnostics was its quarter net in XXXX, million testing adjusted approximately or of lower to increase last growth XX.X% on and was business base of due adjusted impact was year. quarter setting, deliver margin margins revenue business of mix the of to year compared compared the higher Our were this by slightly $XXX negative $XXX initiative pad Diagnostics was primarily base launchpad diagnostics an margins volume or due down million business income costs. COVID XX.X% year Diagnostic's $XXX operating organic driven last demand launch three The compared to the income test. from the XX% to which price due for base by to while operating in savings remains organic business was and second increased. down Relative year. the increase revenue quarter

Now primarily delivered or was therapeutic approximately compared business base second all adjusted I'll of XX%, in basis for to translation favorable year. organic of of and and review XX.X% growth including business and margins the the broad-based XXXX, higher operating COVID currency for the $X.X foreign Revenue to year of due performance of studies. of across drug of businesses annual development. to XX.X%, rate savings, Drug Relative XXX quarter the to were by an increase billion last X.X% development growth points. Adjusted increase approximately driven XXXX, compound growth million for revenue $XXX growth. points. margins were vaccine the quarter launchpad XXX the primarily business and base due to segment basis by was revenue partially to second XX.X% organic the costs. XX.X% personnel income $XXX revenue last base compared organic demand operating Relative offset of quarter up The was or income million acquisitions

this While second be margins we second lower quarter were than first versus first half. margins to the quarter, half base year up business expect our

was year which We also this year margins be our up full to XXXX. over expect over XXXX up

$XX.X the at For to the was an million X.XX trailing $XXX net XX million quarter book of and months, quarter. from strong and net remained Backlog increase bill $X.X respectively. at orders last of billion approximately the end

this of next over the XX months. to billion convert approximately $X.X expect backlog revenue We into

rates foreign as XXXX which of XX, discuss I'll XXXX assumes guidance, our effective full-year. exchange for full-year June the Now

our We the remainder year performance the full strong company's base year drug diagnostics and are both for and second-quarter our improved reflect to raising the development for outlook businesses. of guidance

range from expect level guidance includes enterprise basis X% points. now to XX% also XX% XX%. X% from benefit will expectation to COVID This that is to We X.X% business guidance to XX% of the revenue expected grow This begin translation of currency base down XXX to while to the X.X%. testing foreign the grow prior includes

expected is down from COVID business X% now includes This to that of our development revenue guidance in expectations range guidance X% raising prior XX% the testing our XX% flat. plus to revenue expectation down will while to are to drug for We're XX%. in to minus revenue grow to also the minus XX% raising be XX% prior of to now diagnostics growth to XX%. XX% We base X% for from expectations guidance to XX%

current from that XXX grow the will currency This range guidance also includes points. Our the translation the foreign guidance XX%. includes to of XX% expectation base business basis benefit now

businesses, of flow to $X.X up $X $XX to $X.XX now billion are billion. up expected $XX. raising guidance expectations billion base to $X.XX is to to be between prior prior the adjusted our EPS to we of topline guidance cash from $XX guidance Given billion growth from $XX.X our improved Free of

the Our earnings free guidance and use year. assumes our we for will share accelerate we second half cash repurchases acquisitions of which flow to the in expect

revenue We X.X% X% productivity. by expect to approximately of investments our support capital to be expenditures base will growth business driven and

quarter supplemental the of Relations growing role year In to strong also guidance view focused results. comparison business. additional another pandemic a a included results XXXX critical and have remain while to our in XXXX company We Investor on summary deck second the performing on global we had of base response performance. in the full compared also website For purposes quarter our

profitable through expected progress drive are the second. we we COVID As to to in XXXX growth expect decline our while volumes base testing business in continued

to free for capital continue while acquisitions now questions. through to our returning take share that shareholders also expect use to flow our repurchase program. growth our Operator We generation cash organic supplement well

Operator

Jefferies. Tanquilut Our first Brian instructions] [Operator with

Your line is now open.

Brian Tanquilut

I be Congrats strong guys. my and question strength on there will a Covance. you're morning, strong. seeing quarter. Good good some a Obviously guess

and Just growth the for forward and pace wanted hear outlook how of ability to you that thoughts your about think just business? of going to on do sustainability Covance margins growth high maintain your

Glenn Eisenberg

question. Hi Brian. for Thanks the very much

the certain at the look all had I strong going all strong always we business of and of careful continue said as we it at them had need grew into our margin Labcorp I've we and in as going double-digits Covance people especially be in the forward, if after COVID. we you parts through business and were margins when maintain a look we're areas COVID three drug going those are So for development to COVID. progress quarter doing we're There to development very drug and where at maintain were people, one through look because going quarter any to know total,

a seeing things odd people some slight every we're with that cost also little cost almost initiatives. from bit a quarter. So continues our launchpad in and margins going material industry, to of look but are to increase which offset labor the our We're quarter to like in seeing

yearly was basis margin as before than this business, year. year I'd would year go a year margins will be than the better look our the on which and that believe I development So at and drug we year last better next the into than we will this better expect look in

expand we're to to continue margins So going moving ways find forward. our to

Operator

Thank you.

Our of Meehan from comes question next Jack the line Nephron. with

is open. line now Your

Jack Meehan

the Wanted curious historically. the influence was timing strategic cash billion any to $X below think of on sheet, review you having have the of three turns the is net been in capital allocation, how capital? on balance focus over return you've is You leverage redeploy you if at

the the to of acceleration second pacing on Within you're of magnitude color looking or just redeploy? additional what half any

Adam Schechter

Hi in. jump to Jack ask and Glenn I'll

all we we've to of focused strategy separate to continue we allocation is thoughts. One always two capital our first and allocation acquisitions. So continue execute on said, strategic and on our is do our

interest of one You remaining in those the purchased Omni saw this where we quarter.

quarter, strategic to hospitals and resolve, with we you one looking do said look for a laboratory Minnesota. to area, those were what saw doing area. we're And is going local We're we more we enhance hospital the in announced ways one this to our of strategic Minneapolis acquisitions of oncology with capabilities. then So

through to year. more look this on seen What we with that strategic those from distinct do we feel this do we'll ever pipeline quarter going make is to of robust strategic couple expect go quarter, continue thought close we and we're those acquisitions types the in once conclusions, reach you forward to say of to I've I this do. going confident as review are frankly fourth those close it Separately review the would sharing year. Glenn? the the to we're I that, we we we'll as I of is and progress would but the So have and this more continue to f as

Glenn Eisenberg

But a add only leverage, testing, targeted things Jack, X in our the are generated helped year, has couple thing this of obviously which the higher and testing, the EBITDA, and it's the going, you I'd X.X you're of to been we flow than COVID cash which because improvement when look also normal. is of right, have benefit free helped our times has at has our the it. COVID improved

repurchases. you range. you'd do debt at towards leverage So pandemic, midpoint end to the $X a are for expect on using we on, flow of as upper million the The spent over Having cash our first to leveraged. is Currently far We relative gross the get little call $XXX that you bit of half that profile as range to commented free and our year it said billion. Adam use XXXX, a around our look pre so of our EBITDA the this M&A share in year.

continue repurchase deploy program we've half you'll M&A of be So us spoke share of repurchases a share half, our it implies gives as the confidence both the the but and our than that second more we'll M&A to more Alyssa and the well. use done in towards to again, M&A capital able lot strength given allocation pipeline, first to see we'll which to say

Jack Meehan

Great.

Thanks. to forward Looking updates. the

Operator

Thank you.

question next UBS. from comes the line Kevin Caliendo with of Our

now Your line open. is

Kevin Caliendo

forward? potentially I figure for I'm that would about cause COVID is guess to fell what trying up Is want going by related is little seasonality out there points the about I way that bit to talk right is there? ultimately Thanks. margins there to a XXX revenues that business really margins think yet sequentially, Covance, sequentially the to what were basis about any anything

Glenn Eisenberg

a had businesses things pretty down strong though yeah, commented are nicely. quarter, you you the looking base related of kind just up quarter again, the obviously, at the second bit margins gives that comparison that related margins Covance When view in your first sequentially, a a point, that of the year have both the were was first which to year, look The from business level to seasonality little principally, also testing our over first obviously in quarter. Adam on do are issues you it actually Kevin, doing, timing also Yeah, you remarks and in standpoint how the COVID of within move labor studies COVID from compared was second down higher down in vaccine tight and pass-throughs to the to and the impacting quarter to market versus therapeutic quarter We segment. it.

So that a margins drug will full on a quarter prior year, over commented change. year. first half we it to up that lot be second impact the things What is be we than kind of development, the to that of and within for expect to the expect quarter higher half the we

how from business the the feel base good about So leveraging line growth the business is we standpoint. top

Kevin Caliendo

how And that contemplating quick are has do to both segments guidance expect you that. follow is the impactful guidance up within just or the How that, business. your you far? been that And wage of much to how so pressure impacting

Glenn Eisenberg

the the could course of things provided of that today. that are look So range closely. think potential at included we what that We've guidance we occur we within

reduce other labor speak. And we future. I facing costs think launchpad going to market and cover to the ways to industries that to to in have continue in most just ways find a as through everybody's we're tough

like things continue those clinical and we'll things. areas, virtual find to of other types out ways costs trials So take through to in

Operator

you. Thank

from Our Ricky Stanley. Morgan the next Goldwasser of with line question comes

open. not is line Your

Ricky Goldwasser

morning. good Yeah. Hi,

of a here. questions couple So

monthly about and increase guidance? basis are you often and more going for July it a updates second labor then of us baseline, affect costs how to And we and launchpad. what's for it's on launchpad, First versus X.X% in maybe what versus run XQ all, about you think bit in rate XXXX, and the any second I was comparison a when seeing core the up the base on up testing said secondly in think can on with embedded the you give talked progressed into business the you little what's half details quarter

of the launchpad think XXXX. your I are next for in kind cost of ends What round like savings? plans

Glenn Eisenberg

Yeah.

start So with business. let me the base Ricky

diagnostics which June And June business the look one at saw we So, first rebound the revenue, the is since to to of saw volume stated, increase And for what but the other at to this of thing look time, nicely. base year we in the volume. is XXXX. thing the is compared pandemic, you

shows, a that's continued good and sign So recovery. it

we any at look sense continued volume to this too July, will throughout revenue expectation still see versus As that. year that will this But we give and early continue our it's of year. growth is that XXXX throughout and

Adam Schechter

was seeing we that couple volume making follow-on was of Adam quarter And base fourth of comments to the business session but were more up the just really as a where Ricky maybe because per XXXX said, of shortfall. levels, year for revenue over in was driven crossed tests our favorable that and price we diagnostic last off the mix know

those month continues will, a us, well mix for So price now continue kind we to forward, volume patterns. of with as higher fall with line to of have in expect to signal but as now was you the as June comparing favorably going obviously normal, we over and year as if we crossed this historical progress more rest the a be than through

costs we rising know go an publicly into launchpad We launchpad on costs. just of we year. company our inflationary set completed is of every comment drug as year part diagnostics initiatives. and initiative high last labor your As least really single with but year have mitigate every ongoing particular, process business and the this improvement those really year that's at to offset one have and launchpad up wrap but the we'll development market businesses business, both tight in We

drive costs of lot a that see labor to through continue So the those to efficiency will forward. going opportunities help mitigate continue productivity to to through continue technology,

Operator

you. Thank

the Citi. question Ralph Our next comes with line Giacobbe from of

open. now is line Your

Ralph Giacobbe

get guidance Certainly to seemed help understand the I And to. the it backdrop, the that so on on particularly having wanted seen to Good the assumptions lower first keep is the and pretty that wide it. for ask end pretty Thanks. also maybe morning. of just quickly about that wide fluidity hard then half. guess why

per I average on can number for quarter hoping over is on thanks. around you second per color seen last day And mentioned of average the tests if COVID in you that. half guidance the any of in think can midpoint what us, XX,XXX weeks the assumes where COVID terms of of give you tests you've the couple the give was back day

Adam Schechter

Yeah, on I'll question ranges. and start we context some give you test the with can the

the of look number the average month of of the was June, said, we average in at the tests second if per XX,XXX. is the than it you lower And day As actually quarter XX,XXX.

we're XX% have would've things the the would to less that to the upon reduction quoting we you saw been to beginning trended test we originally a what And with COVID in the have two why the narrowed change gave saying just in in than tasks. that the be also you lowered the in us had saw and that's to year had government terms continue of that been testing variant we XX% down. we would and going Delta those emergency of the slight the XX% in June for the to an XX% of If COVID down data, But extension based situation. for plan. And be we confidence reduction guidance

So, did additional and we provide some really there. narrow that guidance

It's And you ways that about If tests. you saying, by but One know XX% the there. still start I fairly of lot that to we're there's different wide is a can if of will it's number from you get what think at variant and XX%, actually gone numbers, a range. continue. to those look

still the states, other what a you the price. is go fourth mass in good mandated that's kind is will the will in and So range and of about like for flu exist. a flu year? all think very last again, question be different maybe the there to us of is, which season tried if to or range was could certain year, the to that with be there's the those then emergency in we've into an to it start strong think of this triangulate as I XX% be we season light give is you XX%, why If declaration continue quarter variables, do And to uncertainties or obviously what reasonable happen, we

Glenn Eisenberg

reflects I just to they would we the that disagree uncertainty the this that wider new of in kind us. Ralph, guidance year are, ranges. ranges add ahead would the not and visibility thing, only provided, we be the of that is of Yeah, narrowed guess Having and a don't that's only year I we've said than what normal lack with the that or

the call guide the range more the midpoints remaining, of the six So that we to. metrics we've we give and we've annual trumped that financial it increased have months we key all guidance importantly, given

So the reflecting company's performance.

then COVID with was improving gave negative it our have seen we a occur the year, we because but or And So Adam we've at could midpoint point, than guidance the again, the that testing sequential that that said, testing time, around give ranges the things did to there positive lot range was narrowing regards the on side month said for with as of was things were have the lower the being quarter, you we in But put Adam COVID through when you look the the as quarter. when as we which average the it. didn't a that's we've decline a we last gone as June if overall. range, kind each which see, of where kind first the we see a in what of would expect, and of to to specifically

month, was the testing level month. COVID frankly, July prior higher first that the seen than of the For we've

obviously the of to of where ahead feel now advent year, did quarter with we better are for just then so with of Delta but still reason emergency virus health extension uncertainty of this a we the us. gives COVID a the of testing And about that's the with lot public us the ago, advent have

Ralph Giacobbe

That's Thank you. helpful. Okay.

Operator

Thank you.

from Deutsche Our of the next question line Chickering Pito with comes Bank.

open. Your line is now

Justin Bowers

good Hey, Pito. is everyone. on This morning, Justin from Bowers

should pre think we back med XQ something like I'm the the diversion from the kind hearing and tech does versus or but because historic should the is, base hospitals asking messaging really patterns business sounds assume we're how XQ you're about the question of It and COVID back business? shifting at -- like to to different? Just seasonality or volumes, kind above just diagnostics, normal companies. we diagnostics guide And of

on figure guys out where So stand that. trying you to

Adam Schechter

think saw the of better to we it back recovery to and the to year the I from expect the No, compare we with growth comparison, good get comp then last why margins look year, to strong a We're and we to and year at XXXX really our the early similarly, just we pandemic, when trough the in throughout continue standpoint year, we XXXX 'XX. favorable of a focus kind will. year being you to if the see compared Yeah. got kind on relative but XXXX, to on as more obviously normalcy, but still seeing

So to the 'XX definitely seasonality business. and really to point, does look diagnostics taking back your a to has

at at when So where the lay. holidays have to you sequentially, really days you look look and

especially within expect you do we normal when times. occur to patterns So it 'XX normal diagnostics. relative seasonal Again, at to more look

a we margins margin to year compared from them to up of flat expect because it be call on standpoint So Pama. a impact we negative the slightly year, while expect of down be to XXXX to

have As even been volume, pick we feel again, we're growth up far but up. volumes the as to the the that 'XX, good just compared revenue seeing revenues

back to and half next. normal to positive volume more So as growth second that be get favorable 'XX, continue. down mixed from And again, go will expect again, up expectations but that obviously for into this it's which as good year the of be a from trend, we to volumes where racing patterns, pick volumes start come continued will from should been to

Operator

you. Thank

of Our the JPMorgan. Peterson next question from comes line Tycho with

open. not is line Your

Tycho Peterson

curious starting to lot serology, of a there, And And just thinking then obviously around day? lastly, it I'm how COVID you in and A off. does any Yeah, up, then thanks. the July if where like, enough followups wearing outlook about per what on anybody's bacon tests thinking curious able you are to half latest back bigger couple potentially outlook consider I'm specifically, step year? the to ended back to on on the I'm Hey, are programs? discussions that have the school more you you're that quantify just testing, discussion curious looks on lately

Adam Schechter

Yeah. Thank you for the question.

year all I titers. go the we serology to recommend we start questions the of we moment to first. come serology the this to not utilization do. of important next tests serology need try have CDC as At to think many they're with The has out as as year. understand the do through I'll to would rest ability to

people T be do also So have for quantitative we are as think effectiveness serology as the to we're going test that but you as thousands might of we're so tighter, that many not testing, need, day, do as about of and well developing to many to ability every start several but might do you therefore weighting can time. prepared semi if may the memory ultimately a helpful cell to testing understand vaccines which over need we

to continue prepared school. do through we're With it. as we back to of back or it individuals, individual year be regard be school, to as be view develop could personal for we will going need through So really then what tests it honest, is could be. more that's My to and to be than serology pooling. I less testing, think more every building prepared whether be by or and time discussions they've you're important, vaccination be school, capacity whatever having it But over that different about not believe testing we're back and of need that significant serology necessary would I I whatever may to say if point is might particularly could We're be to lot going testing a PCR discussions. been for single we if year, are is for why be a ready to to to if that

We of back pull we're say, the haven't to program. a significant put and going schools lot testing in to school trigger seen a willing to

to So a the we've in of though And would of to we average the of it's going XX%, see different growth would One end other but back month the July, lot we're we're but at testing, not but even be to down for ways provided had you the are certainly price. ended that I the down of is, the within thing weeks a last couple we areas. of XX% we that school a and to to to quarter July, there, much yet say there's of truly look having we're versus multiple have lower that starting see wait discussions up as numbers last get back lot to the range can testing, not to give the you to closer but be could where there. Other ways continue then it'd and have June. first school

Tycho Peterson

on talk through? just on capital labs fall up see Okay. risk broader dynamics as that's that a and of a broader can competitive over the that helpful. offices, maybe smaller you to flow they think year whether and potential kind you back physician have just place a as just about COVID of longer-term maybe And then and Obviously testing follow and lot decentralization on one theme. spent in hospitals past the

Adam Schechter

total small at the testing we you if perform and that so a of number look as if the that or COVID very, a XXX at we tests, it's amount. of or molecular year, tests again, do tests molecular look still Yeah, every percent very you million

might in there be wouldn't our business, though for laboratories even capacity additional hospitals it significant or on types a have tests, So frankly. overall impact molecular

Operator

Thank you.

comes from next De America. Our Bank Bruin of the with Derik question line of

good Your line is not open. morning Hi,

Derik De Bruin

about sort just the let Yeah. of thoughts initial point? consensus the at with sort of the earnings this and the where initial sort like estimates just looking estimates 'XX something XX% some on that So on was 'XX enough and sort wondering right I some, who that, comfortable second of color think your just let assuming grown of where consensus $XX, tough sorry. I by sort you look of your now of XXXX like you off alone, the words streets EPS If that. that and are. number of around if of you $XX what earnings have and around estimates COVID Is I other are gives are but it's, a half 'XX the alone know some things predict at and at any base, 'XX, the know I 'XX for you to

Adam Schechter

Yeah.

figure working expect about XXXX. we break we're to our So still is base you reason to what to to the back We're better to trying the get reason normal how up first is base a out of to a could XXXX? And we're that part sense it testing XXXX, help testing pandemic. And there that we really XXXX. to guidance The not thing to about there versus COVID to providing we're pieces you that think as try you we growth our the prior to the year. like obviously the look we're business, through next I'd that is as covert trying think today would start go you that's business entire rates take out for seen still get have if give giving different say to but

Derik De Bruin

testing follow back you back oncology more know response. a me one your back bit ask well? testing if And that? Great. you can as talked about with I as about talk I that little can up Is going on oncology routine,

some the some hearing about is, of these some are companies. market things the we're the, So other and demand of mixed in

Adam Schechter

actually and, routine on testing here today, went business, it XX% Yeah, and expect. a XX% the they esoteric, testing breakout pandemic. we But that looks down of ecology what XX% stand in we back to the beginning more as testing oncology. come say I standard do would a you our both if about what testing, on about about at more would XX% including the other revenue less that at the is esoteric includes you of look which than It's

them see back. coming we both So

Operator

Thank you.

of line question the comes Blair. William next Larew Matt from Our with

now is open. line Your

Matt Larew

morning. good Hi,

in book are test trying a as patients, guess that on there's catch-up it well, QX I'm first going I as the that curious the time. mentioned how a session just physicians, but touch driver were driver, for or still for to again, you because mentioned as sequentially, things normalizing some sense a if whether You visit get whether, trended

Adam Schechter

that you for specific, give let a Glenn levels to session time, we expect come and a test to give context. can in bit. COVID but I'll additional over pre some already a some Glenn But starting we're to see maybe general, back

Glenn Eisenberg

exactly Yeah, session first quarter, than were the the was levels test than volume well. the it the quarter right. much no, obviously in impact less Sequentially then the but higher first was second per quarter as it's in

over So time. you of more that normalcy will ultimately get sense to back

Matt Larew

Okay.

Now has share given pixel that's the good business? ever any just of looked improved. on and patient volume profile on margin points to last you've like? And then data you some quarters how what to access uptake or But pixel, around look of can the relative here over contribution traditional like couple what either would your data the maybe

Adam Schechter

Yeah.

tests So peak total if you look the do. percent it X% we at at maybe pixel of of from that the ranges anywhere PCR X% to

It's the it. the of and isn't now and it's in margin part that consistent tests have a at or X,XXX where other Instacart they really Walgreens available that been relatively so but like about the of that X% appreciate we and it things margins. Jordache it's use do than So different people total stores armor

Operator

you. Thank

Credit Our next the Swiss. line comes Wright with of from Aaron question

open. now is line Your

Aaron Wright

Covance, mention and business you nature was if partial at COVID new the the coming some terms the you as across still that's the and of work clinical and fundamentals and accessibility, Covance in in across this of of from something Thanks. What in curious the if, well. curious some seeing consolidation with if with offset Great. are up associated wins flow, in cost what the that's in any RFP business of Thanks. site the seeing industry of customers related disruption labor terms your did you quarter, peers space anticipate I'm

Adam Schechter

Sure. I'll additional the some you give business. context

open. I currently thing about of first sites XX% are would The is say

good little the RFPs. a very would be enroll would have the improvement patients. the of RFP significant we flow as it that So at would we go expect XX% I still further But it us open is continued through right into and see strong is than we we to to now. year. have sites would've I thought them allow though, where around go not to continue bit the But, world there yet number say fully a the help news is

to I book chance kind a we're sense, that think it's And really the to we win with RFPs just you mean, look and bring month at And give I backlog. of good that, XX many you mean, a flow have if of our to were healthy very pleased I bill. our of a it to you we getting. trailing those, X.XX

from was $XX.X $XXX XX% an over million and It quarter. billion, of a first year that backlog Our the year. was also increase was increase

were XX% you billion they year. were month our net at almost trailing If $X and up XX they over look orders, year almost

drug us. So, about And the RFPs in seeing the to we're performance dealing any I but if seeing, and then that. And we we're believe seeing, with significant Glenn that just continued drug labor across with. it's don't that talk costs we're we're there's we're different development, you continued growth that want hearing that know that opportunities but not more industries, before diagnostics, development, that something

than other say to we I costs we're a going in to to have find through. think reduce but job doing I then And four and backlog the net good would over with ways you thing dealing X% X.X% it's areas as go it, last to past we're continue the asked our still it's -- percent and orders it's, you quarters. about if small, our the less is of COVID of orders net of relatively our

So small. overall it's

Aaron Wright

preferred lab quick great. steer of how volume? lab you networks, PLN give that front that's can and Okay, And helping us to the on kind on potentially update one follow-up an just in Thanks.

Adam Schechter

end added to and our there's then have and for that customers I've actually I COVID to the and a years the of I thing believe very better I move at to sense a couple or progress execute been on. year difficult in in else the believe we'll everything COVID, the third that saying with ton of do been be a the lot now of year So time direction. a But answer and made and measure makes has over right a in PLN to we it appeal think don't with of for were it row. Unfortunately, will been

meaningful. when So to becomes At glad provide on we're updates this there. we're it continue that we'll point

We with and quality diagnostic have a testing. our to where reduce and help and United great high continue we'll we relationship give with work them at can to colleagues costs

Operator

you. Thank

of comes question Hynes from last Ann line Mizuho. Our the with

Your line is now open.

Ann Hynes

I just Yep. can testing PCR there might increased serology. be into per any know speculation and you you. do health If pricing the test for Thank emergency give that want on public XXXX. that was Great. think maintain Also to extended scenario? revenue also elevated in the labs COVID if so, detail could you

Adam Schechter

thanks for the and Hi, question.

If the that just domestic is high at still XX below you the we in price frankly. look do, eighties, testing our

Price So very emergency be price. next under the pressure. If think the good in going help we move to under pressure it I the States. maintain will to does a with price us year, United continue continue is It's to now. into

respond. we certain second I'm when glad month. the was there total tests us help increase a thing is because enables as a a so that of discussions were And the in period, keep If the and the significant part emergency the certainly payers our that get we're a time. to is our a but degree. it for certainly this quarter that colleagues able to that able saw that Delta might've impacts have on the I because to interesting our do mentioned capacity emergency all of we with that the and every and continue we through number we to kept variant, declared to the normal of do to to we day of that. the things to margins continue having time We reduced way decline of because us we we but lot fact didn't some sudden to and have need. that And despite to pricing declaration before to we're the to going the able continue continue one do that's able helpful emergency that, price The testing is we be one average provide were test. We turnaround do we're for

Ann Hynes

anything opportunity unknown, And range that purposes, follow I the be fruition, we if if that Do I'm would know up. to revenue little assuming would to just test models? but you just for that a still what put have school lower. it becomes our a modeling one that be an on wanted per is

Adam Schechter

it's people test. I it's pass, test than if say, XX it would one individual would pool Yeah, different you could in that a depends. If put an be

same I it you testing to really the would type But it's when want So would harder or doing of surveillance, the if actually pricing would to people agree then that that symptoms. are on they you're testing then depend do. exposed you're with that have have

Adam Schechter

Okay.

So this us. world. guidance. us year I to that to morning that the dedicated colleagues us thank for enterprise, and spending our very have for the across world. the really thank that around one to want increase demonstrated Their a that the I to clear with joining around quarter grateful lives and everybody time very was our of second It's that. doing And health of full our want pursuit enabled their strong tireless are all I'm in have improve mission we efforts employees and answers improve the

quickly progress vaccinated. in about to and diligent vigilant this to the I We're to and people encourage and variant all eligible get the emerge, together. as if everybody encourage continues other the stay vaccinated As as get possible to variants disease and Delta really you're pandemic. I

So everybody you I look talking great you, to to Thank have soon and a forward day.

Operator

call. this gentlemen, today's Ladies you your Thank and concludes for conference participation.

now may disconnect. You

Laboratory Corporation of America (LH) 29 Jul 212021 Q2 Earnings call transcript