What happened

Shares of Quest Diagnostics (DGX 0.91%) climbed 6.3% on Thursday after the medical testing giant boosted its full-year sales and profit forecast. 

So what 

Quest's revenue decreased by 10% year over year to $2.5 billion in the third quarter. The decline was driven by a 55% drop in the company's COVID-19 testing sales.

However, Quest's base business revenue, which excludes COVID testing, grew by 5%.

"We accelerated growth in the base business in the third quarter, with a strong performance across much of the country," incoming CEO Jim Davis said. Davis also noted that base sales trends were stronger in August and September compared to earlier in the year. In fact, Davis said during a conference call with analysts that Quest was seeing some of its highest base testing volumes ever before Hurricane Ian hit in September. 

Still, the decline in coronavirus-related revenue drove a 39% downturn in operating income to $423 million. Its adjusted earnings per share, in turn, fell 40% to $2.36. That was, however, better than the $2.16 in per-share profits Wall Street expected. 

Now what

The promising trends in its base business, and higher projected COVID testing revenue, prompted Quest to raise its full-year financial guidance. Management now expects revenue of $9.72 billion to $9.86 billion in 2022, up from a prior estimate of $9.50 billion to $9.75 billion.

Additionally, Quest lifted the lower end of its adjusted earnings per share target to $9.75 from $9.55. The company also reiterated its forecast for an operating cash flow of at least $1.7 billion.