Labcorp Raises Full-Year Profit Forecast Despite Mixed Segment Results

Labcorp (NYSE: LH) raised its annual profit and revenue forecast on Thursday after reporting second-quarter results that surpassed analyst expectations, driven by strong demand in its drug-development services business and steady diagnostic testing volumes.

Despite the upbeat guidance, the company's shares fell approximately 6% in premarket trading, as investors reacted to slightly softer-than-expected growth in its core Diagnostics Laboratories segment.

Updated 2026 Financial Outlook

Labcorp provided an updated forecast for the full year, signaling confidence in its business trajectory. The new guidance is above prior projections and largely exceeds analyst consensus.

• Adjusted Earnings Per Share: The company now expects adjusted EPS in the range of $18.10 to $18.55, up from a previous range of $17.70 to $18.35. The midpoint of the new forecast, $18.33, is above the LSEG analyst estimate of $18.01.
• Annual Revenue: The revenue forecast was lifted to a range of $14.71 billion to $14.83 billion, compared to the prior $14.65 billion to $14.80 billion.
• Second-Quarter Performance: For the quarter, Labcorp reported total revenue of $3.73 billion, a 5.8% increase, and adjusted earnings of $4.99 per share, beating estimates of $3.71 billion and $4.78, respectively.

Segment Performance and Market Reaction

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The company's Biopharma Laboratory Services segment was a key driver of the strong quarterly performance, with revenue growing 6.5% to $836.2 million, significantly outperforming estimates of $797.3 million. This growth reflects improved spending from pharmaceutical and biotechnology clients.

However, the Diagnostics Laboratories segment, while growing 5.5% to $2.90 billion, came in just shy of analyst expectations of $2.91 billion. According to an analyst note from Leerink Partners, this slight miss in the diagnostics business likely prompted the negative stock reaction, particularly after rival Quest Diagnostics (NYSE: DGX) set a high benchmark with its strong results last week.

Industry Context

The update from Labcorp follows a similar move by Quest Diagnostics, which also recently raised its full-year profit forecast. Both companies have benefited from sustained demand for routine and specialty diagnostic testing, as well as from laboratory management agreements. The results indicate a healthy environment for laboratory services, supported by both stable healthcare utilization and a rebound in research and development spending within the biopharma industry.