(RTTNews) - In a climate of increasing demand for medical diagnostic testing, Quest Diagnostics Inc. (DGX: News ), a provider of diagnostic testing, information and services, continues to reap the benefits of public awareness of the value of diagnostics and early detection. Tuesday, the company posted a 73% rise in net income for the just-concluded third-quarter and increased its profit outlook for the full-year of 2009.

The company's net income for third quarter ended September 30, 2009 was $192.2 million or $1.02 per share, up from $110.8 million or $0.56 per share in the year-ago quarter.

Quest Diagnostics' income from continuing operations for the quarter was $192 million or $1.02 per share compared to $160 million or $0.81 per share in the third-quarter of 2008. In 2008, third quarter results were reduced by a $0.03 per share charge associated with the write-down of an equity investment, and a $0.02 per share impact associated with hurricanes, according to the company. On average, 15 analysts polled by Thomson Reuters expected the company to earn $0.96 per share for the third-quarter of 2009.

A major chunk of the company's revenue comes from its clinical testing business, with the balance derived from insurer services, clinical trials testing, diagnostic products and healthcare information technology. Revenue for the quarter increased 3.9% to $1.89 billion from $1.82 billion in the comparable quarter last year. Clinical testing revenues increased by 4.3% in the third-quarter of 2009 compared to the prior year. The company's revenue was inline with Wall Street analysts' expectation of $1.89 billion.

The company noted that its reported testing volume for the quarter was unchanged from the prior year and reflected a 23% decline in drugs-of-abuse testing volume, which is sensitive to hiring trends, and which reduced the company's consolidated volume by 1.7%.
Quest Diagnostics' bad debt expense as a percentage of revenues for the quarter was 4.4%, unchanged from the second quarter and the prior year.

The company's cash flow from operations for the quarter improved to $374 million from $329 million in the comparable quarter a year before. During the quarter, Quest Diagnostics repurchased $100 million of its common shares and made capital expenditures of $41 million.

For the first nine months of 2009, the company's net income was $547.5 million or $2.90 per share, compared to $411.7 million or $2.09 per share in the year-ago period.

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