Quest Diagnostics Says Sales In Q1 Increased For The First Time Since The Height Of Pandemic

Tuesday, Quest Diagnostics Inc DGX posted first-quarter adjusted EPS of $2.04, beating the consensus of $1.86.

Sales came in at $2.37 billion, up 1.5% Y/Y, higher than the Wall Street estimate of $2.29 billion.

“In the first quarter, we delivered nearly 6% base business revenue growth, continuing the strong momentum of recent quarters. We also grew total revenues for the first time since the height of the pandemic nearly three years ago,” said Jim Davis, Chairman, CEO and President.

“Our strong commercial focus on physicians and hospitals combined with our broad health plan access enabled us to take advantage of sustained high rates of healthcare utilization and drive new customer growth. Our investments within advanced diagnostics also enabled double digit growth within multiple key clinical areas, including brain health, women’s health and advanced cardiometabolic health,” Davis added.

Adjusted operating income slipped slightly from $350 million to $349 million.

Outlook: Quest Diagnostics expects fiscal year 2024 revenues of $9.4 billion-$9.48 billion versus the prior guidance of $9.35 billion-$9.45 billion and consensus of $9.40 billion.

The company forecasts 2024 adjusted EPS of $8.72-$8.97 versus the prior guidance of $8.60-$8.90 and consensus of $8.75.

William Blair notes that the stock is likely to rise today due to better-than-expected metrics and increased operating margins compared to the previous quarter. 

This aligns with the focus of investor attention during the call, and the slight beat on this front is seen positively. 

William Blair writes that Quest is poised for steady growth over the long term, supported by its strategies targeting trends in lab testing such as market consolidation, value-based contracts, advanced cancer diagnostics, and automation. 

William Blair rates the stock as Outperform.

Price Action: DGX shares are up 4.32% at $135.72 at the last check Tuesday.

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