LabCorp earnings short of expectations

Laboratory Corp. of America missed analysts' expectations for earnings as the Burlington-based company reported $31.3 million in charges for job cuts and a laboratory closing.

LabCorp, the second largest provider of medical tests behind New Jersey-based Quest Diagnostics, reported $111.2 million in third quarter profit, or 92 cents per share. That was up 1.5 percent from the same period a year ago. Analysts had expected earnings of at least $1.06 per share, according to Thomson Financial.

Excluding the charges, LabCorp generated $1.07 earnings per share.

Revenue for the three months ending Sept. 30 was $1.02 billion, or 12.2 percent over the third quarter 2006.

LabCorp, which employs 24,000 -- including 1,000 in the Triangle -- is in a fierce competition with Quest.

About a year ago, LabCorp snatched a $3 billion contract from Quest. LabCorp became the exclusive national laboratory for UnitedHealth Group, a Minnesota company that provides health benefits to 70 million Americans.

But in March, LabCorp lost an Aetna contract worth about $100 million a year to Quest. In the past, the health insurer had contracted with both labs for testing of blood and urine samples tested.

Analysts tracking the $40 billion lab testing industry have suggested a price war is brewing.

LabCorp reported quarterly financial results before the market opened. Shares closed at $75.89 Wednesday, but were down nearly 4 percent in pre-market trading.