The 10-second takeaway
For the quarter ended March 31 (Q1), Quest Diagnostics beat expectations on revenue and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue grew and GAAP earnings per share increased.
Gross margin expanded, operating margin were steady, and net margin grew.
Quest Diagnostics logged revenue of $1.94 billion. The 19 analysts polled by S&P Capital IQ anticipated a top line of $1.88 billion on the same basis. GAAP reported sales were 6.3% higher than the prior-year quarter's $1.82 billion.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
Non-GAAP EPS came in at $1.07. The 22 earnings estimates compiled by S&P Capital IQ anticipated $1.01 per share on the same basis. GAAP EPS were $0.99 for Q1 against -$0.33 per share for the prior-year quarter.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 42.3%, 200 basis points better than the prior-year quarter. Operating margin was 15.5%, about the same as the prior-year quarter. Net margin was 8.2%, 1,120 basis points better than the prior-year quarter.
Next quarter's average estimate for revenue is $1.94 billion. On the bottom line, the average EPS estimate is $1.17.
Next year's average estimate for revenue is $7.69 billion. The average EPS estimate is $4.56.
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 544 members out of 580 rating the stock outperform, and 36 members rating it underperform. Among 175 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 168 give Quest Diagnostics a green thumbs-up, and seven give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Quest Diagnostics is hold, with an average price target of $61.53.
The healthcare investing landscape is littered with also-rans and a few major winners. Is Quest Diagnostics prepared for the future? Read "Discover the Next Rule-Breaking Multibagger" to learn about a company David Gardner believes will deliver amazing returns during the next few years. Click here for instant access to this free report.
- Add Quest Diagnostics to My Watchlist.
Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Motley Fool newsletter services have recommended buying shares of Quest Diagnostics. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.