LabCorp Second Quarter Earnings Sneak Peek

S&P 500 (NYSE:SPY) component LabCorp (NYSE:LH) will unveil its latest earnings on Thursday, July 19, 2012. Laboratory Corporation of America provides testing services used by the medical profession in patient diagnosis and in the monitoring and treatment of disease.

LabCorp Earnings Preview Cheat Sheet

Wall St. Earnings Expectations: The average estimate of analysts is for profit of $1.78 per share, a rise of 8.5% from the company’s actual earnings for the same quarter a year ago. During the past three months, the average estimate has moved down from $1.80. Between one and three months ago, the average estimate moved down. It has been unchanged at $1.78 during the last month. Analysts are projecting profit to rise by 9.9% compared to last year’s $7.

Past Earnings Performance: Last quarter, the company beat estimates by 6 cents, coming in at net income of $1.74 a share versus the estimate of profit of $1.68 a share. It marked the fourth straight quarter of beating estimates.

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Balance Sheet Analysis: The company’s current ratio of assets to liabilities came in at 0.42 last quarter. The current ratio is an indication of a firm’s liquidity and ability to meet creditor demands and generally, a ratio less than one could indicate a company may have difficulty meeting current obligations. The company regressed in this liquidity measure from 1.36 in the fourth quarter of the last fiscal year to the last quarter driven in part by an increase in liabilities. Current liabilities increased more than twofold to $2.12 billion while assets decreased 18.7% to $881.6 million.

A Look Back: In the first quarter, profit rose 27.1% to $161.6 million ($1.63 a share) from $127.1 million ($1.23 a share) the year earlier, exceeding analyst expectations. Revenue rose 4% to $1.42 billion from $1.37 billion.

Stock Price Performance: Between May 16, 2012 and July 13, 2012, the stock price had risen $8.58 (9.9%), from $86.67 to $95.25. The stock price saw one of its best stretches over the last year between November 21, 2011 and December 5, 2011, when shares rose for 10 straight days, increasing 8.9% (+$7.04) over that span. It saw one of its worst periods between July 19, 2011 and July 27, 2011 when shares fell for seven straight days, dropping 7% (-$6.82) over that span.

Key Stats:

On the top line, the company is looking to build on four-straight revenue increases heading into this earnings announcement. Revenue rose 13.3% in the second quarter of the last fiscal year, 10% in the third quarter of the last fiscal year and 5.5% in the fourth quarter of the last fiscal year before increasing again in the first quarter.

The company enters this earnings announcement with steady profits recently. Net income has risen year-over-year average of 1.4% for the last four quarters.

Wall St. Revenue Expectations: Analysts are projecting a rise of 2.9% in revenue from the year-earlier quarter to $1.44 billion.

Analyst Ratings: With seven analysts rating the stock as a buy, two rating it as a sell and eight rating it as a hold, there are indications of a bullish outlook.

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(Company fundamentals by Xignite Financials. Earnings estimates provided by Zacks)

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