MADISON, N.J., Jan. 26, 2017 /PRNewswire/ -- Quest Diagnostics Incorporated (NYSE: DGX), the world’s leading provider of diagnostic information services, announced today financial results for the fourth quarter and full year ended December 31, 2016.
“We grew revenues, operating income, margins and operating cash flow in the fourth quarter, capping a strong year in which we achieved our commitments and created value for shareholders,” said Steve Rusckowski, Chairman, CEO and President. “We are laser focused on our two point strategy to accelerate growth and continue to drive operational excellence. Revenue growth in the quarter came from expanding relationships with hospital health systems and strength in several of our advanced diagnostic offerings. Our guidance for full year 2017 reflects expectations for continued acceleration of top-line growth and is consistent with the earnings outlook we provided at our Investor Day in November.”
Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||||||||||||||
2016 | 2015 | Change | 2016 | 2015 | Change | ||||||||||||||||
(dollars in millions, except per share data) | |||||||||||||||||||||
Reported: | |||||||||||||||||||||
Net revenues | $ | 1,861 | $ | 1,849 | 0.7 | % | $ | 7,515 | $ | 7,493 | 0.3 | % | |||||||||
DIS revenues | $ | 1,773 | $ | 1,738 | 2.0 | % | $ | 7,138 | $ | 6,965 | 2.5 | % | |||||||||
Revenue per requisition | 0.4 | % | 0.4 | % | |||||||||||||||||
Requisition volume | 1.5 | % | 2.0 | % | |||||||||||||||||
Operating income (a) | $ | 276 | $ | 239 | 15.4 | % | $ | 1,277 | $ | 1,399 | (8.7) | % | |||||||||
Operating income as a pct of net revenues (a) | 14.8 | % | 12.9 | % | 190 bps | 17.0 | % | 18.7 | % | (170) bps | |||||||||||
Net income attributable to Quest | $ | 155 | $ | 188 | (17.5) | % | $ | 645 | $ | 709 | (9.1) | % | |||||||||
Diluted earnings per share (a) | $ | 1.09 | $ | 1.29 | (15.5) | % | $ | 4.51 | $ | 4.87 | (7.4) | % | |||||||||
Cash provided by operations (b) | $ | 304 | $ | 272 | 11.8 | % | $ | 1,069 | $ | 821 | 30.2 | % | |||||||||
Capital expenditures | $ | 128 | $ | 94 | 35.7 | % | $ | 293 | $ | 263 | 11.5 | % | |||||||||
Adjusted: | |||||||||||||||||||||
Revenues on an equivalent basis | $ | 1,861 | $ | 1,825 | 1.9 | % | $ | 7,515 | $ | 7,324 | 2.6 | % | |||||||||
Operating income | $ | 305 | $ | 288 | 6.1 | % | $ | 1,230 | $ | 1,203 | 2.3 | % | |||||||||
Operating income as a pct of net revenues | 16.4 | % | 15.5 | % | 90 bps | 16.4 | % | 16.1 | % | 30 bps | |||||||||||
Net income attributable to Quest | $ | 173 | $ | 157 | 9.6 | % | $ | 682 | $ | 640 | 6.4 | % | |||||||||
Diluted earnings per share excluding | $ | 1.31 | $ | 1.19 | 10.1 | % | $ | 5.15 | $ | 4.77 | 8.0 | % | |||||||||
(a) | For details impacting the year-over-year comparisons related to operating income, operating income as a percentage of net revenues, net income attributable to Quest Diagnostics and diluted earnings per share, see note 3 of the financial tables attached below. |
(b) | For details impacting the year-over-year comparisons related to cash provided by operations, see note 8 of the financial tables attached below. |
Share Repurchase Authority Increase
In the fourth quarter the company’s Board of Directors increased by $1 billion the amount available under the company’s existing share repurchase program. As of December 31, 2016, $1.4 billion remained available for repurchase under the program.
Outlook for Full Year 2017
The company estimates full year 2017 results as follows:
Low | High | ||
Revenues | $7.64 billion | $7.72 billion | |
Revenue increase on a reported basis | 1.7% | 2.7% | |
Revenue increase on an equivalent basis (c) | 2% | 3% | |
Reported diluted EPS | $4.65 | $4.80 | |
Adjusted diluted EPS excluding amortization | $5.37 | $5.52 | |
Cash provided by operations | Approximately $1.1 billion | ||
Capital expenditures | $250 million | $300 million | |
(c) | Revenues on an equivalent basis for full year 2016 were $7.49 billion which represents the company’s reported revenues, excluding all Focus Diagnostics products revenue, in 2016. |
Note on Non-GAAP Financial Measures
As used in this press release the term “reported” refers to measures under the accounting principles generally accepted in the United States (“GAAP”).
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