Quest Diagnostics Inc. Reports Third Quarter 2012 Financial Results
Published: Oct 17, 2012
MADISON, N.J., Oct. 17, 2012 /PRNewswire/ -- Quest Diagnostics Incorporated (NYSE: DGX), the world's leading provider of diagnostic testing, information and services, announced today that for the third quarter ended September 30, 2012, adjusted income from continuing operations was $190 million, or $1.18 per diluted share, unchanged from the prior year.
For the third quarter of 2012, reported income from continuing operations was $163 million, or $1.01 per diluted share, compared to $172 million, or $1.08 per diluted share, in 2011. Income from continuing operations in the third quarter of 2012 was reduced by $0.17 per diluted share related to restructuring and integration costs. In the third quarter of 2011, income from continuing operations was reduced by $0.10 per diluted share related to restructuring and integration costs.
Revenues were $1.9 billion for the third quarter, 2.9% below the prior year. Clinical testing revenues decreased 2.1%, with volume, measured by the number of requisitions, 1.1% below the prior year and revenue per requisition 1.0% below the prior year.
For the third quarter of 2012, adjusted operating income was $353 million, or 19.1% of revenues, compared to $349 million, or 18.3% of revenues, for 2011. Reported operating income was $309 million, or 16.7% of revenues, compared to $322 million, or 16.9% of revenues, in 2011. Cash provided by operations was $395 million, compared to $338 million in 2011. During the third quarter of 2012, the company reduced outstanding debt by $292 million and repurchased $50 million of its common shares.
"During the quarter, we increased adjusted operating income and delivered strong cash flow, despite continued soft revenues, thanks in large part to our accelerated Invigorate cost-reduction initiative," said Steve Rusckowski, President and CEO. "Our new organizational structure and management team, announced last week, will allow us to drive operational excellence and improve our customer focus, which will, over time, enable us to restore growth. We remain focused on increasing shareholder returns through a combination of improved operating performance and disciplined capital deployment."
For the first nine months of 2012, revenues increased 1.1% from 2011, to $5.7 billion. Adjusted income from continuing operations was $549 million, or $3.42 per diluted share, compared to $532 million, or $3.30 per diluted share in 2011. On a reported basis, income from continuing operations was $500 million, or $3.11 per diluted share, compared to $282 million, or $1.75 per diluted share, for the first nine months of 2011.
Adjusted operating income for the first nine months of 2012 was $1.0 billion, or 18.0% of revenues, compared to $988 million, or 17.5% of revenues, for 2011. On a reported basis, operating income was $943 million, or 16.6% of revenues, compared to $670 million, or 11.9% of revenues, in 2011. Cash provided by operations was $807 million. In 2011, cash provided by operations was $558 million and was reduced by the Medi-Cal settlement payment. During the first nine months of 2012, the company reduced outstanding debt by $507 million and repurchased $150 million of its common shares.
Outlook for Full-Year 2012 Updated
For 2012, the company estimates results from continuing operations, before special items, as follows:
- Revenues to grow approximately 0.5%, compared to the prior outlook of between 1% and 2%;
- Earnings per diluted share to be between $4.45 and $4.55, compared to the prior outlook of $4.45 to $4.60;
- Operating income as a percentage of revenues to approximate 18%, unchanged from the prior outlook;
- Cash provided by operations to approximate $1.2 billion, unchanged from the prior outlook; and
- Capital expenditures to approximate $180 million, compared to the prior outlook of approximately $200 million.
Note on Non-GAAP Financial Measures
As used in this press release, the term adjusted refers to the operating performance measures that exclude the Medi-Cal charge, restructuring and integration charges, transaction costs related to acquisitions, CEO succession costs and the estimated impact of severe weather. Adjusted measures are presented because management believes those measures are useful adjuncts to reported results under accounting principles generally accepted in the United States. Adjusted measures should not be considered as an alternative to the corresponding measures determined under accounting principles generally accepted in the United States.
Conference Call Information
Quest Diagnostics will hold its third quarter conference call on October 17, 2012 at 8:30 a.m. Eastern Time. The public may access the conference call through a live audio webcast available on Quest Diagnostics' Investor Relations internet site at www.QuestDiagnostics.com/investor. The conference call can also be accessed in listen-only mode by dialing 415-228-4961, passcode 3214469. The company suggests participants dial in approximately 10 minutes before the call. Registered analysts may access the call at: www.streetevents.com. In addition, a replay of the call may be accessed online at www.QuestDiagnostics.com/investor or by phone at 888-673-3567 for domestic callers, or 402-220-6430 for international callers. Telephone replays will be available until midnight Eastern Time on November 17, 2012.
Investor Day Scheduled for November 16
As previously announced, Quest Diagnostics will host an investor day with institutional investors and sell-side financial analysts in New York City on Friday, November 16, 2012. During the event, Quest Diagnostics executives will discuss the company's strategy, performance and plans to drive shareholder value. Advanced registration is required for those planning to attend in person. To register for the event, please go to the following website: register.questdiagnostics.com. A live webcast of the event will be broadcast on the Investor Relations page of the Quest Diagnostics website. Additional information on accessing the webcast will be provided at a future date.
About Quest Diagnostics
Quest Diagnostics is the world's 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 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 new diagnostic tests and advanced healthcare information technology solutions that help improve patient care. Additional company information is available at QuestDiagnostics.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," "Risk Factors," "Cautionary Factors that May Affect Future Results," "Legal Proceedings," "Management's Discussion and Analysis of Financial Condition and Results of Operations," and "Quantitative and Qualitative Disclosures About Market Risk" in the company's 2011 Annual Report on Form 10-K and "Management's Discussion and Analysis of Financial Condition and Results of Operations," "Quantitative and Qualitative Disclosures About Market Risk," and "Risk Factors" in the company's Quarterly Reports on Form 10-Q and other items throughout the Form 10-K and the company's 2012 Quarterly Reports on Form 10-Q and Current Reports on Form 8-K.
This earnings release, including the attached financial tables, is available online in the Newsroom section at www.QuestDiagnostics.com.