NEW YORK (GenomeWeb News) – Quest Diagnostics today reported a 4 percent drop year over year in fourth-quarter sales as Hurricane Sandy shrank revenues by $21 million.
For the three months ended Dec. 31, 2012, revenues totaled $1.77 billion, down from $1.85 billion a year ago and short of the consensus Wall Street estimate of $1.80 billion.
Diagnostic information services revenues fell a little more than 4 percent year over year, the company said, adding volume, as measured by the number of requisitions, decreased more than 2 percent from a year ago. Revenue per requisition was down 2 percent. Hurricane Sandy reduced diagnostic information service revenues and volume by 1 percent, Quest estimated.
The company cut its SG&A costs in the quarter 5 percent to $421.0 million from $441.0 million a year ago.
Net income attributable to Quest was $55.8 million, or $.34 per share, compared to $189.5 million, or $1.19 a year ago. On an adjusted basis, EPS was $1.01, compared to $1.20 in Q4 2011, and just short of analyst estimates of $1.02.
The company sold its OralDNA business during the quarter, and last week it announced its intention to sell HemoCue in order to concentrate on its diagnostic information services. It also announced a reorganization of the firm that includes doing away with its past business structure and replacing it with two new business units, Diagnostic Information Services and Diagnostic Solutions. The changes took effect on Jan. 1.
In a statement today, Quest President and CEO Steve Rusckowski said, "During the fourth quarter, continued strong progress in our Invigorate cost-reduction initiative enabled us to mitigate some of the impact of revenue softness, which was exacerbated by the impact of Hurricane Sandy. …We continued to pursue a disciplined approach to capital deployment, announcing a substantial increase in our dividend, repurchasing shares, and investing in strategic opportunities as exemplified by our new relationship with UMass Memorial Health Care."
Quest completed its acquisition of the clinical outreach laboratory business of UMass Memorial Medical Center earlier this month.
For full-year 2012, Quest posted revenues of $7.38 billion, down slightly from $7.39 billion a year ago and missing Wall Street estimates of $7.45 billion.
Its SG&A costs were nearly flat year over year at $1.75 billion.
Net income attributable to the company for the year increased to $555.7 million, or $3.46 per share, from $470.6 million, or $2.92 per share, in 2011. Adjusted EPS was $4.36, short of analyst estimates of $4.42, and down from $4.38 a year ago.
Quest ended 2012 with $295.6 million in cash and cash equivalents.
For 2013, it said that it anticipates revenue growth of between flat and 1 percent with EPS of between $4.35 and $4.55.
"In 2013 our focus will continue to be driving operational excellence and restoring growth," Rusckowski said. "We will build on the positive momentum of our 2012 Invigorate performance in 2013. We expect results from our efforts to restore growth to gradually build throughout 2013, and anticipate continued revenue softness in the first half, with improvement thereafter."
In Wednesday morning trading on the New York Stock Exchange, shares of Quest were down 5 percent at $58.61.