Quest Diagnostics Q3 Earnings Surpass Expectations, Raises Annual Guidance

Quest Diagnostics Inc DGX posted Q3 FY22 adjusted EPS of $2.36, down 40.4% Y/Y, beating the consensus of $2.17.
Sales came in at $2.49 billion, a decline of 10.4% Y/Y, higher than the Wall Street estimate of $2.33 billion.
COVID-19 testing revenues slumped 55.4% to $316 million, while Base business revenues improved 5.1% to $2.17 billion.
Adjusted operating margin compressed to 17% from 25% a year ago.
Jim Davis, CEO-elect, said, "Our base business revenue grew 5% Y/Y in Q3, with performance rebounding in August and September from the softer volume trends we saw earlier in the year. At the same time, we continued to invest in advanced diagnostics and consumer-initiated testing while managing our cost structure to help offset inflationary pressures and declining COVID-19 volumes."
Outlook: Quest Diagnostics expects FY22 sales of $9.72-$9.86 billion, compared to previous guidance of $9.50 - $9.75 billion, compared to the consensus of $8.51 billion.
The company anticipates COVID-19 testing revenues of $1.34-$1.41 billion versus the prior forecast of $1.15 billion - $1.30 billion.
The company forecasts an adjusted EPS of $9.75-$9.95, compared to $9.55 - $9.95 expected earlier and the consensus of $9.68.
Price Action: DGX shares closed 2.25% lower at $126.66 on Wednesday.
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