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Quest Diagnostics' Q2 Revenues Fall

NEW YORK (GenomeWeb News) – Quest Diagnostics today reported that its second-quarter revenues declined 3 percent year over year, as the diagnostics information services firm missed Wall Street estimates on the top and bottom line.

Quest had revenues of $1.82 billion for the three months ended June 30, compared to $1.88 billion for Q2 2012. It fell short of the consensus analysts' estimate of $1.84 billion.

The firm's net income for the quarter was $165.5 million, or $1.07 per share, down from $177.7 million, or $1.11 per share, year over year. On an adjusted basis, Quest's EPS for the quarter was $1.06, below the consensus Wall Street estimate of $1.09 and down from $1.15 in Q2 2012.

"As expected, revenues and earnings improved from first quarter levels, but were down versus the prior year," Quest President and CEO Steve Rusckowski said in a statement. "We saw continued revenue softness in the second quarter compared to the prior year due to lower healthcare utilization and reductions in reimbursement."

He noted that the firm expects a "stronger performance" in the second half of the year.

Quest also announced today that it has sold its royalty rights to a cancer drug candidate called ibrutinib to Royalty Pharma for $485 million in cash. Quest gained rights to the drug, which is currently in Phase III trials, through its 2011 acquisition of Celera.

"We expect to use the proceeds to drive shareholder value, consistent with our capital deployment strategy," Rusckowski said.

Quest finished the quarter with cash and cash equivalents of $148.3 million.

The firm said that it now expects full-year 2013 revenues to be down 1 to 2 percent from its 2012 revenues of $7.38 billion, with EPS between $4.35 and $4.50.

In Thursday morning trade on the New York Stock Exchange, shares of Quest were down around 1 percent at $59.01.