On Tuesday, Oct. 24, lab-testing firm Lab Corp
- Sales grew 6.7% to $909.9 million for the quarter, of which 3.2% was attributed to increased testing volume and 3.5% to increased pricing.
- Net earnings grew 15.7% to $110 million, yet diluted earnings per share advanced 22.7% as the company repurchased its shares. Management reported a couple of other figures that excluded certain restructuring and special charges, but however you cut it, bottom-line expansion was strong.
- Free cash flow generation was also strong, up 15% from last year's third quarter and also above reported net income.
- For full year 2006, management expects diluted earnings in the range of $3.28-$3.33, while for 2007, it's projecting sales growth of 11%-13% and diluted earnings of $3.68-$3.83.
(Figures in millions, except per-share data)
Income Statement Highlights
Avg. Est. |
Q3 2006 |
Q3 2005 |
Change |
|
---|---|---|---|---|
Sales |
$902 |
$910 |
$853 |
6.7% |
Net Profit |
-- |
$110 |
$95 |
15.7% |
EPS |
$0.72 |
$0.81 |
$0.66 |
22.7% |
Diluted Shares |
137 |
146 |
(6.2%) |
Get back to basics with a look at the income statement.
Margin Checkup
Q3 2006 |
Q3 2005 |
Change* |
|
---|---|---|---|
Gross Margin |
42.30% |
41.58% |
0.72 |
Operating Margin |
19.34% |
17.77% |
1.57 |
Net Margin |
12.05% |
11.10% |
0.95 |
Margins are the earnings engine. See how they work.
Balance Sheet Highlights
Assets |
Q3 2006 |
Q3 2005 |
Change |
---|---|---|---|
Cash + ST Invest. |
$321 |
$53 |
510.9% |
Accounts Rec. |
$568 |
$520 |
9.3% |
Inventory |
N/A |
$54 |
N/A |
Liabilities |
Q3 2006 |
Q3 2005 |
Change |
---|---|---|---|
Accounts Payable |
N/A |
$103 |
N/A |
Long-Term Debt |
$603 |
$355 |
69.7% |
Learn the ways of the balance sheet.
Cash Flow Highlights*
Q3 2006 |
Q3 2005 |
Change |
|
---|---|---|---|
Cash From Ops. |
$462 |
$413 |
$49 |
Capital Expenditures |
$68 |
$71 |
($4) |
Free Cash Flow |
$394 |
$342 |
$53 |
Find out why Fools always follow the money.
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Related Foolishness:
- Foolish Fundamentals: Margins
- Foolish Fundamentals: Free Cash Flow
- Foolish Fundamentals: Return on Invested Capital
- Foolish Fundamentals: The Cash Flow Statement
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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.