By Kirell Lakhman
Quest today reported that second-quarter revenue declined 1.4 percent to $1.87 billion from $1.9 billion year over year.
Additionally, clinical testing revenues for the three months ended June 30 decreased 1.6 year over year, while clinical testing volume decreased 1.3 percent and revenue from those requests fell .3 percent.
The company also cut its 2010 revenue projections, saying now that receipts for the year would be 1 percent below those recorded in 2009, as opposed to previous projections, which said they would be 1 percent to 2 percent better.
"During the second quarter … a further slowdown in physician office visits contributed to a decline in our revenues," Quest CEO Surya Mohapatra said in a statement. "Our business continues to perform well in a number of areas, including gene-based and esoteric testing, and the long-term trends for our business are extremely favorable.
But "revenue softness through the first half has made us more cautious about our full-year outlook, and we have reduced 2010 guidance accordingly," he added. "We continue to take actions to accelerate revenue growth, manage our cost structure and invest for the future."
However, an analyst with investment bank Barclays maintained an ‘Overweight’ rating on shares of the company, saying that volumes for the stock "likely remained under pressure in Q210."
"While volume weakness may continue to put pressure on DGX’s ability to reach its guidance, we note that pricing growth should continue to be stable," said the analyst. "Additionally, we believe that [the stock] has the capability to reach its guidance through cost cuts, stock repurchases and accretive acquisitions.”
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