Q3 Trends: Inflation, a tight labor market and plummeting demand for COVID-19 tests sapped LabCorp’s earnings in the third quarter.

The decrease in organic revenue was driven by an 12% drop in COVID-19 testing income. Operating income fell 19 percent because of the decline in COVID testing. 

Growth in what LabCorp calls its “base” business, or anything not directly related to COVID testing, was offset by higher labor costs and the difficulty of recruiting new workers.

“We're trying to hire as many people as we can as fast as we can,” CEO Adam Schechter said in a conference call with investors and analysts on Thursday.

The company added it’s continuing to acquire hospital-owned testing facilities and will accelerate the spinoff of its Clinical Development business in 2023. 

Acquisitions of testing facilities from two major hospital systems, Ascension and RWJ Barnabas has boosted revenue.

“Our hospital and local lab acquisition investment pipeline is very robust, and we see major opportunity,” in the space, Schechter said.  

Forecast lowered: LabCorp generally lowered its forecasts for 2022, with total revenue now expected to decline between 7.5% and 6% from a previous forecast of 6% to 2% drop. COVID testing revenue is forecast to fall between 57% and 59% from guidance of a 50% to 60% decline. Earnings per share also are forecast to range between $19.25 and $20.25 from a previous band of $19.00 to $21.25.

Shares of LabCorp fell 4.6% to $219.38 in late-morning trading on Thursday.