MADISON, N.J., Jan. 24, 2012 /PRNewswire/ -- Quest Diagnostics Incorporated (NYSE: DGX), the world’s leading provider of diagnostic testing, information and services, announced today that for the fourth quarter ended December 31, 2011, adjusted income from continuing operations was $197 million, or $1.23 per diluted share, compared to $179 million, or $1.03 per diluted share, in 2010. For the fourth quarter of 2011, reported income from continuing operations was $190 million, or $1.19 per diluted share, compared to $167 million, or $0.97 per diluted share, in 2010. Income from continuing operations in the fourth quarter of 2011 was reduced by $0.02 per share related to restructuring and integration activities, and $0.02 per share related to CEO succession costs. In 2010, fourth quarter income from continuing operations was reduced by a $0.03 per share restructuring charge and $0.03 per share related to a litigation settlement. Fourth quarter results include a benefit of $0.08 per share in 2011 and $0.05 per share in 2010 associated with discrete tax items.
Revenues increased 3.0% to $1.9 billion for the fourth quarter. Clinical testing revenues increased 2.6%, with revenue per requisition up 2.2% and volume, measured by the number of requisitions, up 0.4%. Year-over-year volume comparisons benefited by 0.4% due to the impact of weather. The acquisitions of Athena and Celera contributed 3.2% to consolidated revenue growth and 2.6% to clinical testing revenue growth.
For the fourth quarter of 2011, adjusted operating income was $336 million or 17.9% of revenues, compared to $313 million or 17.2% of revenues for 2010. Reported operating income was $325 million, or 17.3% of revenues, compared to $294 million, or 16.1% of revenues, in 2010. Cash flow from operations was $338 million, compared to $340 million in 2010. During the fourth quarter of 2011, the company repurchased $50 million of its common shares.
“During the fourth quarter, revenues grew 3%, adjusted earnings per share increased 19%, and cash flow remained strong,” said Surya N. Mohapatra, Ph.D., Chairman and CEO. “We continued to make progress in executing our growth plan and reducing costs. In 2011, we established a solid foundation of strategic assets and capabilities focused on cancer, cardiovascular disease, infectious disease and neurological disorders. In addition, we commenced a multi-year $500 million cost-reduction initiative and returned $1 billion in cash to our shareholders through a combination of share repurchases and dividends. Beginning in 2012, we are increasing our quarterly cash dividend by 70%, and today, we announced our Board of Directors has approved an additional $1 billion share repurchase authorization. We are well positioned for the future, and remain focused on increasing shareholder value.”
Full Year 2011 Performance
Revenues of $7.5 billion increased 1.9% from 2010. The acquisitions of Athena and Celera contributed 2.2% to revenue growth. For 2011, adjusted income from continuing operations was $729 million, or $4.53 per diluted share, compared to $754 million, or $4.23 per diluted share, in 2010. On a reported basis, income from continuing operations was $472 million, or $2.93 per diluted share, in 2011, compared to $723 million, or $4.06 per diluted share, in 2010.
Adjusted operating income for 2011 was $1.3 billion, or 17.6% of revenues, compared to $1.3 billion, or 18.3% of revenues, in 2010. On a reported basis, operating income was $995 million, or 13.2% of revenues, in 2011, compared to $1.3 billion, or 17.6% of revenues, for 2010. Cash provided by operations was $895 million and was reduced by the Medi-Cal settlement payment, restructuring and integration, and transaction costs related to acquisitions, totaling $202 million. Before these items, cash flow was $1.1 billion, compared to $1.1 billion in 2010. During 2011, the company repurchased $935 million of its common shares.
Outlook for 2012
For 2012, the company estimates results from continuing operations, before special items, as follows:
- Revenues to grow between 2% and 2.5%;
- Diluted earnings per share to be between $4.40 and $4.55;
- Operating income as a percentage of revenues to approach 18%;
- Cash from operations to approximate $1.2 billion; and
- Capital expenditures to be between $225 million to $250 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 the acquisitions of Athena and Celera, CEO succession costs, an employment litigation settlement, 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 fourth quarter conference call on January 24, 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. No access code will be required. Telephone replays will be available from 10:30 a.m. Eastern Time on January 24 until midnight Eastern Time on February 23, 2012.
About Quest Diagnostics
Quest Diagnostics Incorporated (NYSE: DGX) is the world’s leading provider of diagnostic testing, information and services that patients and doctors need to make better healthcare decisions. The company, which had 2011 revenues of $7.5 billion, 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: www.QuestDiagnostics.com.
