We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Quest Diagnostics Incorporated’s (DGX - Free Report) second-quarter 2018 adjusted earnings per share (EPS) of $1.75 were on par with the Zacks Consensus Estimate. Adjusted earnings rose 20.5% from the year-ago number.
Reported EPS came in at $1.57, reflecting a 14.4% rise from the year-ago quarter.
Reported revenues in the second quarter moved up 3% year over year to $1.919 billion but fell short of the Zacks Consensus Estimate of $1.96 billion. According to the company, the year-over-year improvement came on the back of successful execution of its two-point strategy of accelerating growth and driving operational excellence.
Volume (measured by the number of requisitions) increased 2.5% year over year in the second quarter. Also, revenue per requisition ticked up 0.2%. Diagnostic information services revenues in the quarter rose 3.3% on a year-over-year basis to $1.835 billion.
Quest Diagnostics Incorporated Price, Consensus and EPS Surprise
Cost of services during the reported quarter was $1.243 billion, up 6.2% year over year. Gross margin came in at 35.2%, reflecting a 200 basis points (bps) contraction year over year.
Coming to operating expenses, selling, general and administrative expenses declined 2% to $351 million in the reported quarter. However, adjusted operating margin showed a contraction of 110 bps to 16.9%.
Quest Diagnostics exited the second quarter with cash and cash equivalents of $132 million, which marked a 6.5% rise from $124 million at the end of first-quarter 2018. Net cash provided by operating activities was $503 million compared with $490 million in the year-ago quarter.
In the second quarter, the company did not repurchase any of the common stock. As of Jun 30, 2018, Quest Diagnostics was left with $0.9 billion of authorization under the approved share repurchase plan.
Guidance Narrowed
Quest Diagnostics has narrowed its 2018 guidance. Excluding the impact of special items, amortization expense and ETB (excess tax benefit associated with stock-based compensation), adjusted EPS for the full year is now projected in the range of $6.53 to $6.67 compared to the previous range of $6.50 to $6.70. The Zacks Consensus Estimate of $6.61 is within the guided range.
Revenues for 2018 are now projected in the band of $7.70 billion to $7.74 billion (annualized growth of 4-4.5%) compared to the previous range of $7.70 billion to $7.77 billion (annualized growth of 4-5%). The current Zacks Consensus Estimate for revenues is pegged at $7.72 billion, well within the company’s projected range.
Operating cash flow for 2018 is still expected at around $1.3 billion. The current estimates for capital expenditure remain unchanged at the range of $350 million to $400 million.
Our Take
Quest Diagnostics is currently refocusing on its core diagnostic information services business and working on disciplined capital deployment.
We are also highly optimistic about the company’s focus on its two-point strategy. The company’s latest collaborations with hospitals and integrated delivery networks continue to act as major growth drivers.
Management also seems upbeat about the expanded long-term strategic partnership agreement with UnitedHealthcare, a business of UnitedHealth Group, to operate as a preferred national laboratory for all of the company’s members starting Jan 1, 2019.
This expanded agreement will provide in-network access to Quest Diagnostics’ complete portfolio of laboratory services to more than 48 million eligible members. Under the expanded tie-up, the companies are going to join forces on a variety of value-based programs.
Further, the company seems to be satisfied with the revenue growth despite lower Medicare reimbursement under Protecting Access to Medicare Act.
Notably, in the last couple of years, Quest Diagnostics has faced several reimbursement issues which have hurt revenues.
Zacks Rank & Key Picks
Quest Diagnostics currently carries a Zacks Rank #3 (Hold). A few better-ranked stocks in the broader medical space are Insulet Corporation (PODD - Free Report) , Align Technology, Inc. (ALGN - Free Report) and Integer Holdings Corporation (ITGR - Free Report) .
Insulet is expected to release second-quarter fiscal 2018 results on Aug 2. The Zacks Consensus Estimate for the quarter's loss per share is pegged at 13 cents and for revenues at $132.9 million. The stock sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here.
Integer Holdings is slated to release second-quarter 2018 results on Apr 25. The Zacks Consensus Estimate for EPS is pinned at 90 cents and for revenues at $381.8 million. The company is a Zacks #1 Ranked player.
Align Technology is expected to release second-quarter 2018 results on Jul 25. The Zacks Consensus Estimate for adjusted EPS is pinned at $1.09 and for revenues at $469.2 million. The stock carries a Zacks Rank of 1.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
Image: Bigstock
Quest Diagnostics (DGX) Q2 Earnings Meet, Guidance Narrowed
Quest Diagnostics Incorporated’s (DGX - Free Report) second-quarter 2018 adjusted earnings per share (EPS) of $1.75 were on par with the Zacks Consensus Estimate. Adjusted earnings rose 20.5% from the year-ago number.
Reported EPS came in at $1.57, reflecting a 14.4% rise from the year-ago quarter.
Reported revenues in the second quarter moved up 3% year over year to $1.919 billion but fell short of the Zacks Consensus Estimate of $1.96 billion. According to the company, the year-over-year improvement came on the back of successful execution of its two-point strategy of accelerating growth and driving operational excellence.
Volume (measured by the number of requisitions) increased 2.5% year over year in the second quarter. Also, revenue per requisition ticked up 0.2%. Diagnostic information services revenues in the quarter rose 3.3% on a year-over-year basis to $1.835 billion.
Quest Diagnostics Incorporated Price, Consensus and EPS Surprise
Quest Diagnostics Incorporated Price, Consensus and EPS Surprise | Quest Diagnostics Incorporated Quote
Cost of services during the reported quarter was $1.243 billion, up 6.2% year over year. Gross margin came in at 35.2%, reflecting a 200 basis points (bps) contraction year over year.
Coming to operating expenses, selling, general and administrative expenses declined 2% to $351 million in the reported quarter. However, adjusted operating margin showed a contraction of 110 bps to 16.9%.
Quest Diagnostics exited the second quarter with cash and cash equivalents of $132 million, which marked a 6.5% rise from $124 million at the end of first-quarter 2018. Net cash provided by operating activities was $503 million compared with $490 million in the year-ago quarter.
In the second quarter, the company did not repurchase any of the common stock. As of Jun 30, 2018, Quest Diagnostics was left with $0.9 billion of authorization under the approved share repurchase plan.
Guidance Narrowed
Quest Diagnostics has narrowed its 2018 guidance. Excluding the impact of special items, amortization expense and ETB (excess tax benefit associated with stock-based compensation), adjusted EPS for the full year is now projected in the range of $6.53 to $6.67 compared to the previous range of $6.50 to $6.70. The Zacks Consensus Estimate of $6.61 is within the guided range.
Revenues for 2018 are now projected in the band of $7.70 billion to $7.74 billion (annualized growth of 4-4.5%) compared to the previous range of $7.70 billion to $7.77 billion (annualized growth of 4-5%). The current Zacks Consensus Estimate for revenues is pegged at $7.72 billion, well within the company’s projected range.
Operating cash flow for 2018 is still expected at around $1.3 billion. The current estimates for capital expenditure remain unchanged at the range of $350 million to $400 million.
Our Take
Quest Diagnostics is currently refocusing on its core diagnostic information services business and working on disciplined capital deployment.
We are also highly optimistic about the company’s focus on its two-point strategy. The company’s latest collaborations with hospitals and integrated delivery networks continue to act as major growth drivers.
Management also seems upbeat about the expanded long-term strategic partnership agreement with UnitedHealthcare, a business of UnitedHealth Group, to operate as a preferred national laboratory for all of the company’s members starting Jan 1, 2019.
This expanded agreement will provide in-network access to Quest Diagnostics’ complete portfolio of laboratory services to more than 48 million eligible members. Under the expanded tie-up, the companies are going to join forces on a variety of value-based programs.
Further, the company seems to be satisfied with the revenue growth despite lower Medicare reimbursement under Protecting Access to Medicare Act.
Notably, in the last couple of years, Quest Diagnostics has faced several reimbursement issues which have hurt revenues.
Zacks Rank & Key Picks
Quest Diagnostics currently carries a Zacks Rank #3 (Hold). A few better-ranked stocks in the broader medical space are Insulet Corporation (PODD - Free Report) , Align Technology, Inc. (ALGN - Free Report) and Integer Holdings Corporation (ITGR - Free Report) .
Insulet is expected to release second-quarter fiscal 2018 results on Aug 2. The Zacks Consensus Estimate for the quarter's loss per share is pegged at 13 cents and for revenues at $132.9 million. The stock sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here.
Integer Holdings is slated to release second-quarter 2018 results on Apr 25. The Zacks Consensus Estimate for EPS is pinned at 90 cents and for revenues at $381.8 million. The company is a Zacks #1 Ranked player.
Align Technology is expected to release second-quarter 2018 results on Jul 25. The Zacks Consensus Estimate for adjusted EPS is pinned at $1.09 and for revenues at $469.2 million. The stock carries a Zacks Rank of 1.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>