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Quest Diagnostics Q2 Revenues Rise 4 Percent, Beat Analyst Estimates

NEW YORK (GenomeWeb) – Quest Diagnostics today reported a 4 percent increase year over year in its second quarter revenues, as the company narrowly beat consensus analyst estimates on the top and bottom lines.

Quest reported that for the three months ending June 30, it had $1.90 billion in revenues, up from $1.82 billion in the year-ago quarter. The average analyst estimate was for $1.88 billion.

Diagnostic information service revenues rose about 5 percent year over year, it said, while volume, measured by the number of requisitions, was up 8 percent. Revenue per requisition decreased 2 percent year over year. Acquisitions contributed 7 percent to revenues during the second quarter but reduced revenue per requisition 1 percent, Quest said.

Net income attributable to Quest's common shareholders was $133 million, or $.92 per share, compared to $165 million, or $1.07 per share, a year ago. On an adjusted basis EPS in the most recently completed quarter was $1.08, nudging past the consensus Wall Street expectation of $1.06.

SG&A expenses in the quarter rose 5 percent year over year to $440 million from $418 million. Quest said that net income during Q2 2014 was negatively impacted by $24 million related to restructuring and integrations costs associated with recent acquisitions, as well as the company's ongoing efforts to drive operational excellence and to simplify the organization.

Quest finished the quarter with $144 million in cash and cash equivalents.

Quest President and CEO Steve Rusckowski said in a statement that the firm made "good progress executing our strategy" while underlying trends improved for pricing and volume. Additionally, Quest saw "strong testing growth in infectious disease, prescription drug monitoring, and general health and wellness" in the quarter.

He noted that Quest launched its OncoVantage solid tumor cancer panel through a relationship with Memorial Sloan Kettering Cancer Center during the quarter and the company is "on track to meet our commitments for 2014."

The company revised its guidance for full-year 2014. For continuing operations, before special items, revenues are now expected to increase between 2.5 percent and 3.5 percent year over year, compared to a previous guidance of a 2 percent to 4 percent increase. Adjusted EPS is anticipated to be in the range of $4 to $4.10, compared to earlier guidance of $3.95 to $4.15.

In morning trading on Thursday on the New York Stock Exchange, shares of Quest slid a fraction of 1 percent to $61.05.

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