UPDATE 2-LabCorp says bad weather behind fourth-quarter profit drop
Feb 8 (Reuters) - Diagnostics testing company Laboratory Corp of America Holdings reported a drop in fourth-quarter profit on Friday and said bad weather had been partly to blame.
The company reported net income of $120.2 million, or $1.26 per share, down from $135.4 million, or $1.34 per share, a year earlier.
It also said that it would buy back $1 billion in shares.
Earnings excluding amortization related to the end of a licensing agreement, restructuring costs and other charges came to $1.54 a share. The result would have been 9 cents per share higher if not for "inclement weather," the company said. In the fall, Superstorm Sandy shut transportation systems and destroyed thousands of homes in the Northeast.
Analysts had expected fourth-quarter earnings of $1.62 per share, according to Thomson Reuters I/B/E/S.
The government has cut payments for lab tests as part of efforts to stem the rise in healthcare spending. As use of medical services has fallen during the past few years with the economic downturn, Lab Corp and competitors have also been hurt.
In addition, Lab Corp and Quest Diagnostics Inc, the No. 1 U.S. laboratory testing company, face falling test volumes as hospitals buy physician groups, which order tests to be conducted at the hospital labs.
The changing environment is part of healthcare reform, which has introduced new repayment methods for hospitals and doctors as well as various taxes on the medical industry to help pay for the 30 million more people expected to have insurance under the Affordable Care Act.
Lab Corp said revenue was $1.4 billion, in line with analyst consensus estimates for fourth-quarter revenue of $1.39 billion, according to Thomson Reuters I/B/E/S.
The company said 2013 revenues would rise 2 percent to 3 percent and also projected an increase in earnings per share from 2012, when it reported profit of $6.82 per share excluding items.
For 2013, Lab Corp said it expects earnings of $6.85 per share to $7.15 per share, excluding items, but reflecting an expected reduction in payments from Medicare of about 35 cents per share.
Analysts had expected 2013 earnings of $7.26 per share, according to Thomson Reuters I/B/E/S.