Quest Diagnostics
Revenue from its drug testing and its risk assessment businesses is fairly sensitive to the economy. Fewer new hires require less drug testing, which resulted in a 16% decline in the drug testing segment. But fortunately, those two businesses make up only 10% of revenue. The other 90% is derived through diagnostic tests that people need no matter what the economic climate is like.
While revenue was up just 1.7% year over year in the fourth quarter, earnings per share were up a more substantial 10% as lower interest payments boosted the bottom line.
Next year looks better. With cost-cutting efforts kicking in, Quest expects to grow annual revenue by 3% and earnings per share by 8% to 15%.
Some of that increase in earnings per share will apparently come from the $500 million share repurchase that the company expects to undertake next year. Unlike the ever growing group of companies -- Citigroup
With personalized medicine on the rise, Quest Diagnostic and its archrival, Laboratory Corp. of America
In good times and bad, people need diagnostic tests, and Quest seems well poised to give them what they need.
More Foolishness to get you through the bad times:
- A recession-resistant mutual fund.
- Is the tech industry the recession's next victim?
- A recession is an awfully good time to invest. Seriously!