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UPDATE 2-Lab testing firms Quest, LabCorp face low-volume growth
* Quest sees 2012 rev growth of 1-2 pct
* Quest maintains 2012 EPS view
* LabCorp narrows 2012 revenue view
By Esha Dey
July 19 (Reuters) - The top two laboratory testing providers, Quest Diagnostics Inc and Laboratory Corp of America Holdings, lowered their revenue forecasts as a shaky economy and an uncertain reimbursement environment lead to fewer lab tests.
However, second-quarter profits at both companies were in line with analysts' estimates as they successfully cut costs to improve margins.
Quest shares were down 4 percent at $60.45 in morning trade on the New York Stock Exchange while LabCorp shares were down more than 6 percent at $87.60.
While Quest Diagnostics kept its 2012 profit estimates unchanged, smaller peer LabCorp narrowed its earnings forecast, saying it was continuing to face a "low-volume-growth environment."
Both companies said they were seeing growth slowing in their vitamin D tests, which had posted strong growth for some time. LabCorp also said its histology category, which studies cells and tissues, is seeing continued weakness.
As President Barack Obama's healthcare reform plan -- which aims to cut down on soaring healthcare costs while ensuring everyone has access to care -- gains traction, lab-testing companies like Quest and LabCorp are facing pressure from managed care providers to reduce testing costs.
Quest's clinical testing volume rose 0.7 percent, but revenue was nearly flat at $1.91 billion, compared with Wall Street's estimate of $1.94 billion.
On a conference call with analysts, Quest CEO Steve Rusckowski said sluggish market conditions continued to affect the business.
The company now expects 2012 revenue to grow between 1 percent and 2 percent, down from its previous forecast of 2 percent to 2.5 percent.
"We view (Quest's) volume growth positively, yet pricing was disappointing. We also note that LabCorp's volumes were disappointing as they were largely unchanged from 2011," J.P. Morgan analyst Lisa Gill said.
LabCorp, which bought smaller rival Medtox Scientific Inc last month, expects its 2012 revenue to grow 2 to 3 percent, down from its earlier forecast of 2 to 3.5 percent.
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