NEW YORK (GenomeWeb) – Quest Diagnostics today reported that its first quarter sales declined around 2 percent year over year with reimbursement issues and an "unseasonably harsh winter" cited as factors for the decrease.
The Madison, NJ-based clinical lab and diagnostic information services firm reported revenues from continuing operations of $1.75 billion, down from $1.79 billion in the first quarter of 2013. It matched the consensus Wall Street estimate.
The firm said its diagnostic information services revenue fell around 2 percent year over year with revenue per requisition down nearly 3 percent due to "expected changes in reimbursement and last year's toxicology acquisition." It added that recent acquisitions added between 2 and 3 percent to its diagnostic information services revenue growth, but the "unseasonably harsh winter throughout the United States reduced revenues and volume by approximately 2 percent and adjusted earnings per share by approximately $.11."
Quest posted net income from continuing operations of $104 million, or $.71 per share, compared to $116 million, or $.72 per share, for Q1 2013. On an adjusted basis, EPS from continuing operations was $.84, down from $.89 for Q1 2013 and below the consensus analyst estimate of $.88.
Quest spent $415 million on SG&A, down around 7 percent from $448 million in Q1 2013.
"We made progress executing our five-point strategy in the quarter, and saw signs of continued stabilization in underlying pricing, volume and revenue trends, despite the unusually harsh winter," Quest President and CEO Steve Rusckowski said in a statement. "We expect to show positive revenue growth beginning in the second quarter of 2014 and throughout the remainder of the year. We continue to make progress on our top priority of restoring growth, have completed three acquisitions so far this year, and recently signed a laboratory professional services relationship with our first integrated delivery network."
Quest expects full-year 2014 revenue to increase between 2 percent and 4 percent over 2013, and it expects to report adjusted EPS between $3.95 and $4.15.
It finished the quarter with $144 million in cash and cash equivalents.
In Thursday morning trade on the New York Stock Exchange, shares of Quest were down 2 percent at $57.30.