MADISON, N.J., Jan. 25, 2011 /PRNewswire/ -- Quest Diagnostics Incorporated (NYSE: DGX), the world’s leading provider of diagnostic testing, information and services, announced that for the fourth quarter ended December 31, 2010, income from continuing operations was $167 million, or $0.97 per diluted share, compared to $182 million, or $0.97 per diluted share, for the fourth quarter of 2009. Fourth quarter 2010 results include charges associated with workforce reductions ($0.03 per share) and the settlement of employment litigation ($0.03 per share), which were partially offset by a benefit of $0.05 per share primarily associated with the favorable resolution of tax contingencies.
Fourth quarter revenues of $1.8 billion were 1.3% below the prior year level. Clinical testing revenues were 1.4% below the prior year. Revenue per requisition was 1.5% below the prior year, and in line with the last two quarters. Clinical testing volume, measured by the number of requisitions, was 0.1% above the prior year level.
“We generated strong cash flow in the quarter, and were encouraged by the continued improvement in our volume trends and the stability in revenue per requisition,” said Surya N. Mohapatra, Ph.D., Chairman and Chief Executive Officer. “We have taken actions to strengthen our sales organization, expand our pipeline of new tests and services, and improve our operating efficiency, which position us for revenue and EPS growth.”
For the fourth quarter, operating income was $294 million, or 16.1% of revenues, compared to $330 million, or 17.9% of revenues, for the fourth quarter of 2009. The 2010 fourth-quarter charges reduced operating income as a percentage of revenues by approximately 1.0%. Bad debt expense as a percentage of revenues was 3.8%, compared to 3.9% in the prior year. Days sales outstanding were 44 days. Cash flow from operations was $340 million compared to $360 million for 2009. During the quarter, the company made capital expenditures of $69 million.
Quest Diagnostics also announced today that its Board of Directors has approved an additional $750 million share repurchase authorization, bringing the company’s current authorization to $1 billion. The company repurchased $750 million of its shares in 2010.
Full Year Performance
Income from continuing operations was $723 million, or $4.06 per diluted share, compared to $730 million, or $3.88 per diluted share, for 2009. Revenues of $7.4 billion were 1.2% below the prior year level.
Operating income for 2010 was $1.3 billion, or 17.6% of revenues, compared to $1.4 billion, or 18.2% of revenues, for 2009. Cash flow from operations was $1.1 billion, compared to $1 billion in 2009. Cash provided by operations in 2009 was reduced by the net impact of the NID settlement. During 2010, the company made capital expenditures of $205 million.
Outlook for 2011
Full-year 2011 guidance, before potential special items, is:
- Earnings per diluted share between $4.10 and $4.30;
- Revenues to grow approximately 1%;
- Operating income to approximate 18% of revenues;
- Cash from operations to approximate $1.1 billion; and
- Capital expenditures to approximate $220 million.
Quest Diagnostics will hold its fourth quarter conference call on January 25, 2011 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 in the U.S. at 866-350-3614 for domestic callers, or 203-369-0039 for international callers. No access code will be required. Telephone replays will be available from 10:30 a.m. Eastern Time on January 25 until midnight Eastern Time on February 22, 2011.
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 diagnostic tests and advanced healthcare information technology solutions that help improve patient care. Additional company information is available at www.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 2009 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 2010 Quarterly Reports on Form 10-Q and other items throughout the Form 10-K and the company’s 2010 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.
© 2000-2011 Quest Diagnostics Incorporated. All rights reserved. Quest, Quest Diagnostics, the associated logo, and all associated Quest Diagnostics marks are the registered trademarks of Quest Diagnostics.
Contacts:
For Quest Diagnostics: Kathleen Valentine (Investors), +1-973-520-2900, or Gary Samuels, (Media), +1-973-520-2800
TABLES FOLLOW
Quest Diagnostics Incorporated and Subsidiaries | ||||||||||
Consolidated Statements of Operations | ||||||||||
For the Three and Twelve Months Ended December 31, 2010 and 2009 | ||||||||||
(in millions, except per share and percentage data) | ||||||||||
(unaudited) | ||||||||||
Three Months Ended | Twelve Months Ended | |||||||||
2010 | 2009 | 2010 | 2009 | |||||||
Net revenues | $ 1,824.0 | $ 1,848.2 | $ 7,368.9 | $ 7,455.2 | ||||||
Operating costs and expenses: | ||||||||||
Cost of services | 1,080.4 | 1,070.3 | 4,317.2 | 4,321.5 | ||||||
Selling, general and administrative | 431.0 | 432.9 | 1,707.7 | 1,747.6 | ||||||
Amortization of intangible assets | 10.7 | 9.5 | 39.2 | 37.1 | ||||||
Other operating expense (income), net | 7.7 | 5.1 | 9.3 | (10.1) | ||||||
Total operating costs and expenses | 1,529.8 | 1,517.8 | 6,073.4 | 6,096.1 | ||||||
Operating income | 294.2 | 330.4 | 1,295.5 | 1,359.1 | ||||||
Other income (expense): | ||||||||||
Interest expense, net | (37.6) | (34.8) | (146.1) | (144.1) | ||||||
Equity earnings in unconsolidated joint ventures | 7.0 | 7.7 | 29.6 | 33.3 | ||||||
Other income (expense), net | 3.3 | (11.0) | 5.3 | (20.4) | ||||||
Total non-operating expenses, net | (27.3) | (38.1) | (111.2) | (131.2) | ||||||
Income from continuing operations before taxes | 266.9 | 292.3 | 1,184.3 | 1,227.9 | ||||||
Income tax expense | 91.6 | 101.5 | 425.5 | 460.4 | ||||||
Income from continuing operations | 175.3 | 190.8 | 758.8 | 767.5 | ||||||
Loss from discontinued operations, net of taxes | (1.1) | (0.2) | (1.8) | (1.3) | ||||||
Net income | 174.2 | |||||||||
