Some stocks might be struggling in 2020, but not Quest Diagnostics (DGX -0.56%). The diagnostics information services provider's shares were up more than 20% as of the market close on Wednesday.

Quest announced its second-quarter results before the market opened on Thursday. Were those results good enough for the company to keep its momentum going? Here are the highlights from Quest's Q2 update.

Scientist in lab looking through a microscope.

Image source: Getty Images.

By the numbers

Quest generated revenue in the second quarter of $1.83 billion, down 6.4% year over year. This met the consensus Wall Street revenue estimate.

The company reported net income in the second quarter of $185 million, or $1.36 per diluted share, based on generally accepted accounting principles (GAAP). This reflected a significant drop from Quest's GAAP earnings in the prior-year period of $226 million, or $1.66 per diluted share.

Quest announced Q2 adjusted earnings of $1.42 per diluted share. This represented a decline from the $1.73 per share recorded in the same quarter of 2019. However, it narrowly beat the average analysts' adjusted earnings estimate of $1.41 per share.

Behind the numbers

CEO Steve Rusckowski referred to recent months as "one of the most challenging periods in our history." But the COVID-19 pandemic both hurt and helped Quest in the second quarter.

The company's base testing volume dropped sharply compared to the prior-year period. Fewer patients visited physicians and hospitals during the lockdowns imposed due to the coronavirus outbreak, so fewer lab tests were performed. 

However, Rusckowski stated that Quest "stepped up and rapidly expanded COVID-19 testing for the country." This testing offset some of the declines in other diagnostic testing. As a result, Rusckowski said that the company "delivered stronger-than-expected performance in the second quarter."

Quest's bottom line was helped by lower spending in Q2. The company's total operating expenses fell 6.2% year over year, primarily as a result of a lower cost of services.

Looking ahead

The company withdrew its full-year 2020 outlook in April. However, after its solid performance in the second quarter, Quest reinstated its full-year guidance. The diagnostics information services provider expects net revenue will be between $8 billion and $8.6 billion. Quest anticipates GAAP diluted earnings per share (EPS) will be between $5.66 and $7.66 with adjusted diluted EPS between $6.60 and $8.60.

COVID-19 will continue to be the big story for the healthcare stock. Rusckowski said that Quest plans to expand its COVID-19 testing capacity during the remainder of 2020.