Please ensure Javascript is enabled for purposes of website accessibility
Free Article Join Over 1 Million Premium Members And Get More In-Depth Stock Guidance and Research

Quest Diagnostics Beats Expectations in Q1

By Keith Speights - Apr 23, 2019 at 7:46PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The diagnostics information services company provided an upside surprise on both the top and bottom lines.

Quest Diagnostics ( DGX 0.18% ) reported a deteriorating financial performance when it announced its fourth-quarter results in February. Revenue fell by 1.4% year over year while earnings dropped by 49.5%. 

The company announced its first-quarter results before the market opened on Tuesday. This time around, Quest had good news for investors. Here are the highlights from the diagnostic information services company's first-quarter update.

Scientist holding a vial of blood

Image source: Getty Images.

By the numbers

Quest Diagnostics' top-line performance improved in the first quarter. Revenue increased 0.4% year over year to $1.89 billion. Analysts estimated that the company's revenue for the first quarter would come in at $1.87 billion. 

The company announced GAAP net income of $164 million, or $1.20 per share, in the first quarter. This represented a 5.4% decrease from $177 million, or $1.27 per share, reported in the same quarter of 2018.

On a non-GAAP adjusted basis, Quest Diagnostics' net income in the first quarter was $190 million, or $1.40 per share. This reflected a 7.9% decrease from the prior-year period's adjusted net income of $211 million, or $1.52 per share. Wall Street analysts estimated that Quest would post earnings of $1.49 per share in the quarter.

Behind the numbers

It was music to investors' ears when Quest released its quarterly update Tuesday morning after the company's disappointing Q4 performance. Why was the company's revenue better than expected? CEO Steve Rusckowski said that there has been "solid volume growth from our expanded health-plan access."

Quest was able to deliver better-than-expected earnings in part from its higher revenue. The company also controlled its costs effectively -- operating expenses increased by only 1.92% year over year to $1.64 billion.

Looking ahead

Quest expects that revenue for full-year 2019 will be between $7.6 billion and $7.75 billion. The company anticipates GAAP EPS to be greater than $5.16, with adjusted non-GAAP EPS greater than $6.40.

Rusckowski also expects the rest of 2019 to be a continued year of growth: "We look forward to continued progress as a member of UnitedHealthcare's Preferred Lab Network beginning July 1. We continue to drive productivity to address ongoing reimbursement pressure, and are well positioned to meet our financial commitments for the remainder of 2019."

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis – even one of our own – helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Quest Diagnostics Incorporated Stock Quote
Quest Diagnostics Incorporated
$160.44 (0.18%) $0.29

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 12/09/2021.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Our Most Popular Articles

Premium Investing Services

Invest better with the Motley Fool. Get stock recommendations, portfolio guidance, and more from the Motley Fool's premium services.