Lab-testing firm BioReference Labs (NASDAQ:BRLI) continues to be an interesting regional play on an industry that should benefit as medicine becomes more personalized, versus the current one-size-fits-all approach.  Aging baby boomers also mean more medical care as time goes on, suggesting growth in lab tests to diagnose, treat, and prevent medical conditions. Below are the vital stats to get Fools up to speed on the firm's third-quarter earnings announcement, set for tomorrow.  

What analysts say:

  • Buy, sell, or waffle? Three analysts follow BioReference Labs; one is bullish, while two are on the fence with hold ratings. The Motley Fool CAPS community gives the company a favorable five-star rating (out of five).
  • Revenue. Analysts are projecting $60.8 million in third-quarter sales, or about 24% above last year's sales amount. 
  • Earnings. Analysts expect earnings of $0.28, or a penny above last year's $0.27, in quarterly earnings.

What management says:
Back when BioReference Labs reported second-quarter results, management said it would be difficult to grow as fast as the company has historically, but estimated full-year projections would "approach" 20% sales growth and operating income expansion "should exceed 30%."  

What management does:
BioReference Labs is a fraction of the size of archrivals Quest Diagnostics (NYSE:DGX) and LabCorp of America (NYSE:LH), but has proven more than able to compete in the hotly-contested Northeastern lab-testing market, as sales have grown close to 20% annually over the past five years and earnings growth has averaged close to 40% over this time.    

Margins

1/06

4/06

7/06

10/06

1/07

4/07

Gross

50.9%

51.2%

51.2%

52.0%

52.2%

52.1%

Operating

7.6%

8.4%

8.5%

9.3%

9.6%

9.6%

Net

4.6%

5.2%

5.6%

5.8%

5.9%

5.7%

All data courtesy of Capital IQ, a division of Standard & Poor's. Data reflects trailing-12-month performance for the quarters ended in the named months.

One Fool says:
Scale matters in the industry, which benefits Quest and LabCorp because they can achieve economies of scale by spreading more volume over a fixed facility base. Also, a national platform helps them win large contracts with managed-care giants such as UnitedHealth (NYSE:UNH), Aetna (NYSE:AET), and Cigna (NYSE:CI).

What BioReference Labs lacks in clout, it can make up for investors by growing faster. A smaller installed base means that new physician and other contracts have a more significant effect on the top and bottom lines. Plus, it has yet to significantly move outside of the New York metropolitan area, and management recently said it intends to expand "focused testing markets throughout the country."

For more related Foolishness:

LabCorp and UnitedHealth are Stock Advisor selections. Quest Diagnostics and UnitedHealth are Inside Value recommendations.

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