LabCorp on Wednesday reported a net loss for the first quarter as the coronavirus pandemic drove up costs and cut demand, prompting the company to withdraw 2020 guidance.
The company reported total revenue of $2.82 billion, up 1% from a year earlier. However, the company posted a net loss of $317.2 million, versus earnings of $185.6 million a year earlier.
Burlington, North Carolina-based LabCorp reported costs of $437.4 million that "were triggered by the current economic conditions as a result of the COVID-19 pandemic." It reported another $21.9 million in costs directly related to the coronavirus for the quarter, which ended March 31.
The company, which manufactures diagnostic tests, said the coronavirus outbreak drove a 50% to 55% plummet in demand for testing services at the end of the quarter from the year earlier period. That hit to demand was "marginally offset by an increase in demand for COVID-19 tests," the company said, adding that the drop in volume appears to have stabilized.
To mitigate the effects of the coronavirus pandemic, LabCorp said it is scaling back expenditures and suspending its stock buyback program. It said it's also furloughing workers, delaying hiring, reducing contractors and suspending 401(k) contributions for all U.S. employees. The company said it is looking to utilize available federal stimulus programs.
Shares of LabCorp finished the day down more than 1%.
"During the quarter we delivered solid performance across the company, especially considering the challenges associated with the COVID-19 pandemic," CEO Adam Schechter said in a statement.
LabCorp said it expects to make up for the hit to testing demand by ramping up its capacity to conduct Covid-19 antibody testing to more than 200,000 screenings per day by mid-May.
The company began to offer antibody testing, which can determine whether someone has been exposed to and already recovered from the virus, at some Walgreens stores on Monday. The drugstore chain now has the blood tests at more than 100 LabCorp centers within its stores.
The company said it will continue to increase its production of Covid-19 diagnostic tests, including an at-home offering. The Food and Drug Administration granted approval for the at-home test earlier this week. The test allows people to collect a sample for themselves via a nasal swab and send it to a lab.The diagnostic test will first be available to health-care workers and first responders who receive a recommendation by a health-care provider.
Despite those cutbacks, the company said its liquidity remains strong. As of March 31, the company had $324 million in cash and $924 million available under its revolving credit facility.
Correction: This story has been updated to correct that LabCorp is based out of Burlington, North Carolina.