Quest Diagnostics Incorporated, the world’s leading provider of diagnostic information services, announced financial results for the third quarter ended September 30, 2021.
- Third quarter revenues of $2.77 billion, down 0.4% from 2020
- Third quarter reported diluted earnings per share (“EPS”) of $4.02, down 2.8% from 2020; and adjusted diluted EPS of $3.96, down 7.9% from 2020
- Year to date cash provided by operations of $1.75 billion, up 19.6% from 2020
- Raises full year 2021 outlook to reflect higher than anticipated COVID-19 testing volumes and base business performance
SECAUCUS, N.J., Oct. 21, 2021 /PRNewswire/ -- Quest Diagnostics Incorporated (NYSE: DGX), the world’s leading provider of diagnostic information services, announced today financial results for the third quarter ended September 30, 2021.
“We had a strong third quarter, as COVID-19 molecular volumes increased throughout the summer while our base business continued to deliver solid volume growth versus the prior year and 2019,” said Steve Rusckowski, Chairman, CEO and President. “In late summer we experienced some softness in the base business across the country, but saw an overall rebound in September. Importantly, our base business continued to improve sequentially in the third quarter which speaks to the ongoing recovery.”
“We have raised our outlook for the remainder of the year based on higher than anticipated COVID-19 volumes as well as the continued progress we expect to see in our base business despite rising labor costs and inflationary pressures. The momentum of our base business positions us to deliver the 2022 outlook we shared at our March investor day.”
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||
| 2021 | 2020 | Change | 2021 | 2020 | Change | |||||||||||||||||
| (dollars in millions, except per share data) | ||||||||||||||||||||||
| Reported: | ||||||||||||||||||||||
| Net revenues | $ | 2,774 | $ | 2,786 | (0.4) | % | $ | 8,044 | $ | 6,435 | 25.0 | % | ||||||||||
| Diagnostic Information Services revenues | $ | 2,703 | $ | 2,709 | (0.2) | % | $ | 7,820 | $ | 6,217 | 25.8 | % | ||||||||||
| Revenue per requisition | (5.4) | % | 2.2 | % | ||||||||||||||||||
| Requisition volume | 5.3 | % | 22.9 | % | ||||||||||||||||||
| Organic requisition volume | 3.2 | % | 19.2 | % | ||||||||||||||||||
| Operating income (a) | $ | 652 | $ | 718 | (9.3) | % | $ | 1,845 | $ | 1,176 | 56.9 | % | ||||||||||
| Operating income as a percentage of net revenues (a) | 23.5 | % | 25.8 | % | (2.3) | % | 22.9 | % | 18.3 | % | 4.6 | % | ||||||||||
| Net income attributable to Quest Diagnostics (a) | $ | 505 | $ | 568 | (11.0) | % | $ | 1,605 | $ | 852 | 88.4 | % | ||||||||||
| Diluted EPS (a) (b) | $ | 4.02 | $ | 4.14 | (2.8) | % | $ | 12.41 | $ | 6.25 | 98.5 | % | ||||||||||
| Cash provided by operations | $ | 561 | $ | 862 | (34.9) | % | $ | 1,752 | $ | 1,464 | 19.6 | % | ||||||||||
| Capital expenditures | $ | 89 | $ | 91 | (1.9) | % | $ | 259 | $ | 256 | 1.2 | % | ||||||||||
| Adjusted (a): | ||||||||||||||||||||||
| Operating income | $ | 694 | $ | 831 | (16.4) | % | $ | 1,986 | $ | 1,350 | 47.1 | % | ||||||||||
| Operating income as a percentage of net revenues | 25.0 | % | 29.8 | % | (4.8) | % | 24.7 | % | 21.0 | % | 3.7 | % | ||||||||||
| Net income attributable to Quest Diagnostics | $ | 498 | $ | 591 | (15.7) | % | $ | 1,411 | $ | 912 | 54.7 | % | ||||||||||
| Diluted EPS (b) | $ | 3.96 | $ | 4.31 | (7.9) | % | $ | 10.91 | $ | 6.69 | 63.1 | % | ||||||||||
| (a) | For further details impacting the year-over-year comparisons related to operating income, operating income as a percentage of net |
| (b) | The sum of reported and adjusted diluted EPS for the first three quarters of 2021 did not equal the totals for the nine months ended September 30, 2021 due to both quarterly fluctuations in the company’s earnings and in the weighted average common shares outstanding throughout the period as a result of the impact of accelerated share repurchase agreements (“ASRs”) that the company entered into during April 2021. |
Updated Outlook for Full Year 2021
The company updates its Full Year 2021 outlook as follows:
| Updated Outlook | Previous Outlook | ||||||
| Low | High | Low | High | ||||
| Net revenues | $10.45 billion | $10.60 billion | $9.84 billion | $10.09 billion | |||
| Net revenues increase | 10.7% | 12.3% | 4.3% | 6.9% | |||
| Reported diluted EPS | $14.69 | $15.09 | $12.54 | $13.24 | |||
| Adjusted diluted EPS | $13.50 | $13.90 | $11.65 | $12.35 | |||
| Cash provided by operations | Approximately $2.2 billion | At least $2.0 billion | |||||
| Capital expenditures | Approximately $400 million | Approximately $400 million | |||||
Note on Non-GAAP Financial Measures
As used in this press release the term “reported” refers to measures under accounting principles generally accepted in the United States (“GAAP”). The term “adjusted” refers to non-GAAP operating performance measures that exclude special items such as restructuring and integration charges, certain financial impacts resulting from the COVID-19 pandemic, amortization expense, excess tax benefits (“ETB”) associated with stock-based compensation, costs associated with donations, contributions, and other financial support through Quest for Health Equity, the company’s initiative with the Quest Diagnostics Foundation to reduce health disparities in underserved communities, a gain on sale of an ownership interest in a joint venture, gains associated with changes in the carrying value of our strategic investments, and other items.
Non-GAAP adjusted measures are presented because management believes those measures are useful adjuncts to GAAP results. Non-GAAP adjusted measures should not be considered as an alternative to the corresponding measures determined under GAAP. Management may use these non-GAAP measures to evaluate our performance period over period and relative to competitors, to analyze the underlying trends in our business, to establish operational budgets and forecasts and for incentive compensation purposes. We believe that these non-GAAP measures are useful to investors and analysts to evaluate our performance period over period and relative to competitors, as well as to analyze the underlying trends in our business and to assess our performance. The additional tables attached below include reconciliations of non-GAAP adjusted measures to GAAP measures.
Conference Call Information
Quest Diagnostics will hold its quarterly conference call to discuss financial results beginning at 8:30 a.m. Eastern Time today. The conference call can be accessed by dialing 888-455-0391 within the U.S. and Canada, or 773-756-0467 internationally, passcode: 7895081; or via live webcast on the company’s website at www.QuestDiagnostics.com/investor. The company suggests participants dial in approximately 10 minutes before the call.
A replay of the call may be accessed online at www.QuestDiagnostics.com/investor or, from approximately 10:30 a.m. Eastern Time on October 21, 2021 until midnight Eastern Time on November 4, 2021, by phone at 866-360-7722 for domestic callers or 203-369-0174 for international callers. Anyone listening to the call is encouraged to read the company’s periodic reports, on file with the Securities and Exchange Commission, including the discussion of risk factors and historical results of operations and financial condition in those reports.
About Quest Diagnostics
Quest Diagnostics empowers people to take action to improve health outcomes. Derived from the world’s largest database of clinical lab results, our diagnostic insights reveal new avenues to identify and treat disease, inspire healthy behaviors and improve health care management. Quest annually serves one in three adult Americans and half the physicians and hospitals in the United States, and our nearly 50,000 employees understand that, in the right hands and with the right context, our diagnostic insights can inspire actions that transform lives. www.QuestDiagnostics.com.
Forward Looking Statements
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, impacts of the COVID-19 pandemic and measures taken in response, adverse results from pending or future government investigations, lawsuits or private actions, the competitive environment, the complexity of billing, reimbursement and revenue recognition for clinical laboratory testing, changes in government regulations, changing relationships with customers, payers, suppliers or strategic partners and other factors discussed in the company’s most recently filed Annual Report on Form 10-K and in any of the company’s subsequently filed Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, including those discussed in the “Business,” “Risk Factors,” “Cautionary Factors that May Affect Future Results” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of those reports.
This earnings release, including the attached financial tables, is available online in the Newsroom section at www.QuestDiagnostics.com.
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SOURCE Quest Diagnostics
Company Codes: NYSE:DGX
