Quest Diagnostics Inc.'s (DGX) second-quarter profit improved
17% as the diagnostic-testing company posted improved margins and
revenue.
The results led the company to raise its 2009 earnings forecast,
as the company continues to see increased demand for testing for
cancer, sexually transmitted diseases and allergies.
Quest's focus on cancer diagnostics and gene-based and esoteric
testing has helped fuel revenue growth, albeit at low levels.
Margins have also improved recently due to the company's cost
cutting efforts and profitable revenue mix.
The company reported earnings of $188.2 million, or $1.00 a
share, up from $161.3 million, or 82 cents a share, a year earlier.
The latest results included a 5-cent per share insurance benefit,
offset by charges of 4 cents a share related to the company's
recently completed debt repurchase and an investment writeoff.
Revenue grew 3.5% to $1.9 billion as revenue per requisition
increased 4.6%.
Analysts polled by Thomson Reuters expected per-share earnings
of 95 cents on revenue of $1.89 billion.
Operating margins rose to 18.3% from 16.2%.
Clinical-testing revenue, which accounts for a bulk of total
revenue, rose 4% despite a 0.6% decrease in volume. Drug-abuse
testings, which are sensitive to job-hiring volume, tumbled
24%.
Looking ahead, the company boosted its 2009 earnings forecast by
a nickel to $3.70 to $3.80 a share. Quest also still sees revenue
growth of 3%.
Shares were up 0.4%, or 23 cents, to $56.24 in premarket
trading. The shares are up by more than 45% from their 52-week low
in October.
-By John Kell, Dow Jones Newswires; 212-416-2480; john.kell@dowjones.com