Quest Diagnostics Inc. Reports Strong Revenue and Earnings Growth in First Quarter 2008

MADISON, N.J., April 21 /PRNewswire-FirstCall/ -- Quest Diagnostics Incorporated , the nation's leading provider of diagnostic testing, information and services, announced that for the first quarter ended March 31, 2008, income from continuing operations was $141 million, or $0.72 per diluted share, compared to $108 million, or $0.55 per diluted share, in the first quarter of 2007. Included in the results for the first quarter of 2007 were special charges of $0.04 per diluted share principally associated with workforce reductions.

First quarter revenues were $1.8 billion, an increase of 16.9% compared to the prior-year level. The inclusion of AmeriPath, which the company acquired on May 31, 2007, increased consolidated revenues by 13%. Clinical testing revenues increased by 17.1% compared to the prior year. Revenue per requisition increased 10.8% and clinical testing volume, measured by the number of requisitions, increased 5.6%. The acquisition of AmeriPath increased revenue per requisition by 7.8% and clinical testing volume by 5.8%.

"Quest Diagnostics generated strong growth in the first quarter, with a 17% increase in revenues and a 31% increase in earnings per share," said Surya N. Mohapatra, Ph.D., Chairman and Chief Executive Officer. "We are making good progress executing our plans; driving profitable revenue growth; continuing to reduce our cost structure and improve efficiency; and further aligning our AmeriPath business with Quest Diagnostics."

Dr. Mohapatra continued: "We also produced double-digit revenue growth in our near-patient, or point-of-care, testing business and opened our lab in India. We completed the first quarter firmly on track to meet our growth commitments for 2008."

Bad debt expense as a percentage of revenues was 4.8%, compared to 4.4% at the end of the first quarter of 2007. Days sales outstanding were 48 days, unchanged from the fourth quarter of 2007. Cash flow from operations was $158 million, compared to $152 million in the first quarter of 2007. During the quarter, the company reduced debt by $113 million, and made capital expenditures of $47 million.

Outlook for 2008 Reaffirmed

For the full year 2008, the company continues to expect results from continuing operations as follows: earnings per diluted share of between $3.00 and $3.20, revenue growth of approximately 9%, and operating income to approach 17% of revenues. Over the same period, the company expects cash from operations to approximate $900 million and capital expenditures of between $280 million and $300 million. These estimates exclude potential special charges.

Quest Diagnostics will hold its first quarter conference call on April 21, 2008 at 8:30 A.M. Eastern Time. A simulcast of the call is available by dialing 210-839-8500, passcode 3214469 and via the Internet at: www.questdiagnostics.com. Registered analysts may access the call at: www.streetevents.com. In addition, a replay of the call will be available from 10:30 A.M. on April 21 through 11 P.M. on May 19, 2008 to investors in the U.S. by dialing 866-431-7950. Investors outside the U.S. may dial 203-369-0981. No password is required for either number.

About Quest Diagnostics

Quest Diagnostics is the leading provider of diagnostic testing, information and services that patients and doctors need to make better healthcare decisions. The company offers the broadest access to diagnostic testing services through its national network of laboratories and patient service centers, and provides interpretive consultation through its extensive medical and scientific staff. Quest Diagnostics is a pioneer in developing innovative diagnostic tests and advanced healthcare information technology solutions that help improve patient care.

Quest Diagnostics maintains the largest private clinical laboratory data warehouse in the United States. The data is used to generate Quest Diagnostics Health Trends(TM), which identifies and tracks disease and wellness benchmarks, and the Drug Testing Index(R), which is published as a public service for government, media and industry and has been considered a benchmark for national drugs-of-abuse trends since its inception in 1988. Additional company information is available at www.questdiagnostics.com.

About Quest Diagnostics' Campaign to Challenge Colorectal Cancer

Quest Diagnostics recently launched a new education campaign aimed at breaking down barriers to compliance with tests used to screen for colorectal cancer. The goal of the new campaign is to have five million people complete their annual testing over the next five years. The Challenge urges individuals to talk to their healthcare providers about annual colorectal cancer screening using the InSure(R) FIT(TM) take-home test. Medical experts advise that anyone at age 50 or older at average risk should, as one of their screening options, be screened annually with an FOBT or FIT for this disease. To learn more about the Challenge and InSure FIT, please visit www.DoYouHaveTheGuts.com.

The statements in this press release which are not historical facts may be forward-looking statements. Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date that they are made and which reflect management's current estimates, projections, expectations or beliefs and which involve risks and uncertainties that could cause actual results and outcomes to be materially different. Risks and uncertainties that may affect the future results of the company include, but are not limited to, adverse results from pending or future government investigations, lawsuits or private actions, the competitive environment, changes in government regulations, changing relationships with customers, payers, suppliers and strategic partners and other factors discussed in "Business" in Part I, Item 1, "Risk Factors" and "Cautionary Factors that May Affect Future Results" in Item I, Part 1A, "Legal Proceedings" in Part I, Item 3, "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Part II, Item 7 and "Quantitative and Qualitative Disclosures About Market Risk" in Part II, Item 7A in the company's 2007 Annual Report on Form 10-K and other items throughout the Form 10-K and the company's Current Reports on Form 8-K.

CONTACT: Laure Park (Investors), +1-973-520-2900, or (Media) Gary Samuels,
+1-973-520-2800 or Nancy Fitzsimmons, +1-973-520-2800

Web site: http://www.questdiagnostics.com/

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