Oct. 24--LabCorp is doing better at navigating challenging economic conditions, analysts said Thursday after the Burlington medical testing company turned in a respectable third quarter.

As Americans continue to tighten their belts to counter rising living costs, unemployment and financial uncertainty, some wait longer to go to the doctor and others ignore their medical bills. In July, a drop in revenue forced LabCorp to announce layoffs and facility closings, and lower its projected earnings for the full year.

But in the third quarter, the company was better able to prevent bad debt. It also focused on tests that help assess risk factors for serious and costly diseases such as cancer and kidney failure.

Third-quarter profits were flat including $11.2 million in restructuring charges. But excluding them, profits rose nearly 11 percent to $123.1 million in the three months ended Sept. 30. Revenue increased 11.2 percent compared to the same quarter a year ago.

"They did a good job," said David MacDonald, a health care analysts with SunTrust Robinson Humphrey Capital. "You've go to be realistic about the economic environment companies are operating in."

In the third quarter, the company generated better revenue growth and higher profit margins than its larger competitor, New Jersey-based Quest Diagnostics, Robert Willoughby, a Bank of America analyst wrote in his research note.

But he wrote questions remain bout LabCorp's financial outlook.

The company reaffirmed its revenue and profits projection for the full year, but preliminary projections for 2009 allow for revenue growth from 3.5 percent to 5.5 percent. The broad range leaves some uncertainty, Willoughby wrote.

LabCorp, which employs about 1,000 in the Triangle, contracts with health insurers to run medical lab tests for their members.

"We are pleased that we delivered strong third quarter results in a challenging environment," David King, LabCorp's chief executive, said in a statement. "We saw solid growth in volume and price, very strong operating cash flow and success in our actions related to bad debt."

Shares closed at $59.90 Thursday, up $1.42. The stock is down 23 percent in the past year.

sabine.vollmer@newsobserver.com or 919-829-8992

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