Quest Diagnostics Q3: 7.7% Topline Decline, Earnings Beat, Updated Guidance & More

Quest Diagnostics Incorporated DGX posted Q3 FY23 adjusted EPS of $2.22, down 5.9% Y/Y, beating the consensus of $2.19.

Sales came in at $2.295 billion, a decline of 7.7% Y/Y, higher than the Wall Street estimate of $2.27 billion.

COVID-19 testing revenues slumped 92% to $26 million, while Base business revenues improved 4.6% to $2.27 billion.

Adjusted operating income declined 10.1% to $380 million. Net income fell 12.2% to $225 million.

Adjusted operating margin compressed to 16.6% from 17% a year ago.

Jim Davis, Chairman, CEO & President, commented, "We grew our base business revenues nearly 5% in the third quarter, largely due to strength in our physician and hospital channels. In addition, we are pleased that we have now successfully negotiated all of our strategic health plan renewals that were scheduled for this year. Also in the third quarter, we improved the productivity of our base business both sequentially and year over year."

Outlook Raised: Quest Diagnostics revised FY23 revenue guidance to $9.19 billion-$9.24 billion vs. consensus of $9.18 billion (prior guidance: $9.12 billion-$9.22 billion).

The company narrowed its adjusted EPS outlook to $8.65- $8.75 from the prior guidance of $8.50-$8.90 and against the consensus of $8.71.

Price Action: DGX shares are up 0.25% at $121.75 on the last check Tuesday.