1YPEG analysis for LH (LabCorp)

Have been looking at this one for awhile and never pulled the trigger for one reason or another (usually something else was far more compelling). Am back looking at this and wanted someone to cross-check my numbers for LH (LabCorp Holdings):

From most recent to least recent, the press releases:

FY15Q1: http://phx.corporate-ir.net/phoenix.zhtml?c=84636&p=irol… says:

"Q1 Diluted EPS of $0.01; Q1 Adjusted EPS of $1.73, up 15% over last year

The Company’s earnings were reduced by restructuring and special items of $191.3 million ($138.7 million impacted operating income and $52.6 million impacted interest expense), or $141.3 million after-tax. As a result, the Company recognized net earnings in the quarter of $0.7 million, or $0.01 per diluted share, compared to $113.1 million, or $1.31 per diluted share, last year. Adjusted EPS (excluding amortization, restructuring and special items) were $1.73 in the first quarter, compared to $1.51 in the first quarter of 2014. "

FY14Q4: http://phx.corporate-ir.net/phoenix.zhtml?c=84636&p=irol…
FY14Q3: http://phx.corporate-ir.net/phoenix.zhtml?c=84636&p=irol…
FY14Q2: http://phx.corporate-ir.net/phoenix.zhtml?c=84636&p=irol…
FY14Q1: http://phx.corporate-ir.net/phoenix.zhtml?c=84636&p=irol…
FY13Q4: http://phx.corporate-ir.net/phoenix.zhtml?c=84636&p=irol…
FY13Q3: http://phx.corporate-ir.net/phoenix.zhtml?c=84636&p=irol…
FY13Q2: http://phx.corporate-ir.net/phoenix.zhtml?c=84636&p=irol…

There’s a severe mix of how the numbers are presented, and I have a hard time “adjusting” an EPS number for “impacts from inclement weather” (FY13Q4)… but I think this is correct non-GAAP EPS data for last 8 quarters (most recent at the left):

recent 4Q: 0.01 1.39 1.59 1.64
previous 4Q: 1.31 1.61 1.61 1.8

P/E (share price of 119.63): 25.83
1Y growth: -26.86%
1YPEG: -0.962

My big question is whether that 0.01 for most recent quarter is accurate. They took a hit for “restructuring and special items” … but I’m not sure that fundamentally changes the story, only the numbers being reported.

What say you? The 1YPEG seems way off because of that most recent quarter, but maybe that’s what it’s supposed to be. Or did I bork this one?

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What I’ve learned from reading Saul’s FAQ is that you want to use the adjusted EPS numbers when they are available. Use those if you trust management. If you don’t trust management you can use the other numbers, but given the circumstances around trust you probably don’t want to be in the stock anyway.

At first blush, I would use 1.73 for Q1 2015 and 1.51 for Q1 2014.


Ok, then let me re-post corrected EPS data for LH, with the last 3 numbers being 1y TTM P/E, 1y Growth and 1YPEG, and the first 8 numbers being most recent quarterly EPS, with most recent at left.

1.73 1.65 1.8 1.84 1.51 1.61 1.8 1.8 1.8 17.16 4.46% 3.844

Still not interested in buying this one. Moving on to more interesting stocks… (I opened a position on AMBA today, for example… definitely missed the big 40% run-up, but looks like it has more to offer.)