Quest Diagnostics Inc. (DGX) Wednesday reported a decline in first-quarter profit, reflecting mainly lower revenues. The diagnostic testing services provider also backed its full-year earnings per share outlook.
Steve Rusckowski, president and CEO of the company said, "Our results for the quarter reflect our previously stated expectation for revenue softness during the first half of 2013, with gradual improvement throughout the remainder of the year."
For full year 2013, the company still expects adjusted earnings to be between $4.35 and $4.55 per share. Revenues are now expected to be approximate the prior year level, compared to previous guidance of 0 to 1 percent growth. For 2012, Quest Diagnostics reported revenues of $7.38 billion.
Analysts expect the company to report earnings of $4.41 per share on revenues of $7.38 billion for 2013.
In the first quarter, net income attributable to common stockholders declined to $135.8 million or $0.85 per share from $159.1 million or $0.99 per share in the previous year.
Income from continuing operations was $115.5 million or $0.72 per share, lower than $156.1 million or $0.97 per share in the prior year.
The company noted that income from continuing operations in the first quarter of 2013 was reduced by $45 million or $0.17 per share, related to restructuring and integration costs. Adjusted earnings from continuing operations were $0.89 per share, while the company posted $1.05 per share last year.
On average, 22 analysts polled by Thomson Reuters expected the company to earn $1.03 per share for the quarter. Analysts' estimates typically exclude special items.
Net revenues for the quarter declined 6.4 percent to $1.79 billion from $1.91 billion in the prior-year quarter, which also came below analysts' estimate of $1.86 billion. Diagnostic information services revenues decreased 6.7 percent from last year.
Separately, Quest Diagnostics announced that it has entered into a definitive agreement to acquire lab-related clinical outreach service operations of Dignity Health, a hospital system based in California.
The deal is expected to be neutral to adjusted earnings in 2013 and modestly accretive to earnings per share in 2014. The company also expects it to contribute about half a percentage point to consolidated revenues annually. The transaction is expected to be completed in June 2013..
DGX is currently trading at $57.67, down 1.17 percent, on a volume of 355 thousand shares.
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