Clean Bill of Health at LabCorp: Fool by Numbers

On Feb. 15, laboratory testing firm LabCorp (NYSE: LH  ) released fourth-quarter and year-end results for the period ended Dec. 31. Here are the quick-and-dirty details for the quarter.

• Total sales grew 9.3%, ahead of analyst expectations, thanks to a 5.6% increase in testing volumes and 3.7% increase in price.
• Diluted earnings advanced an impressive 26.6%, including restructuring charges primarily related to the announced retirement of the CEO.
• Reported operating cash flow was $170.2 million
• Management is projecting 2007 operating cash flow of $690 million-$710 million, and net sales growth of 11%-13%.
• LabCorp is a crowd favorite in Motley Fool CAPS, our stock-rating service. The company has the top five-star ranking.

(Figures in millions, except per-share data)

Income Statement Highlights

	Avg. Est.	Q4 2006	Q4 2005	Change
Sales	$874	$899	$822	9.3%
Net Profit	--	$104	$89	16.6%
EPS	$0.72	$0.81	$0.64	26.6%
Weighted Ave. Shares	--	129	142	(9.2%)

*Net profit includes restructuring charges. Three months ended Dec. 31, 2006 and 2005

Get back to basics with a look at the income statement.

Margin Checkup

	Q4 2006	Q4 2005	Change*
Gross Margin	42.18%	40.44%	1.74
Operating Margin	18.11%	16.51%	1.60
Net Margin	12.06%	10.81%	1.25

*Expressed in percentage points.

Margins are the earnings engine. See how they work.

Balance Sheet Highlights

Assets	Q4 2006	Q4 2005	Change
Cash + ST Invest.	$187	$63	196.2%
Accounts Rec.	$541	$493	9.7%

Liabilities	Q4 2006	Q4 2005	Change
Long-Term Debt	$1,157	$1,147	0.8%

Learn the ways of the balance sheet.

Cash Flow Highlights

	Q4 2006	Q4 2005	Change
Cash From Ops.	$632	$574	10.1%
Capital Expenditures	$116	$94	23.8%
Free Cash Flow	$516	$481	7.4%

*12 months ended Dec. 31, 2006 and 2005

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Comparable companies:

• Quest Diagnostics (NYSE: DGX  )
• Alliance Imaging (NYSE: AIQ  )
• Bio-Reference Labs (Nasdaq: BRLI  )
• Psychemedics Corp. (AMEX: PMD  )

Related Foolishness:

• Foolish Forecast: LabCorp Tests Positive
• LabCorp's Positive Results
• LabCorp Takes Names
• 5 More Frugal 5-Star Stocks

Fool by Numbers is designed to give you the raw earnings information in a timely fashion, putting all the numbers you need in one easy-to-read place. But at The Motley Fool, we believe numbers tell only part of the story, so check Fool.com for more of our in-depth discussion of what the numbers mean.

LabCorp is a recommendation of Motley Fool Stock Advisor. Discover why with a free 30-day trial.

Fool contributor Ryan Fuhrmann has no financial interest in any company mentioned. Feel free to email him with feedback or to discuss any companies mentioned further. The Fool has an ironclad disclosure policy.