Quest Diagnostics Incorporated (NYSE: DGX), the world’s leading provider of diagnostic information services, announced today financial results for the second quarter ended June 30, 2021.
“We had another strong quarter, with a faster than expected recovery in our base business,” said Steve Rusckowski, Chairman, CEO and President. “This was the first quarter since 2019 that organic base testing revenues grew in the quarter, driven by contributions from new hospital lab management contracts as well as people returning to the healthcare system. We are well-positioned to continue our momentum and support the return to health care in the coming months, which is reflected in the outlook we have provided for the remainder of 2021.”
|
Three Months Ended June 30, |
Six Months Ended June 30, |
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|
2021 |
2020 |
Change |
2021 |
2020 |
Change |
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|
(dollars in millions, except per share data) |
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|
Reported: |
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|
Net revenues |
$ |
2,550 |
$ |
1,827 |
39.5 |
% |
$ |
5,270 |
$ |
3,649 |
44.4 |
% |
||||||||||
|
Diagnostic Information Services revenues |
$ |
2,474 |
$ |
1,764 |
40.2 |
% |
$ |
5,117 |
$ |
3,508 |
45.9 |
% |
||||||||||
|
Revenue per requisition |
(3.6) |
% |
8.1 |
% |
||||||||||||||||||
|
Requisition volume |
45.2 |
% |
34.7 |
% |
||||||||||||||||||
|
Organic requisition volume |
40.1 |
% |
30.0 |
% |
||||||||||||||||||
|
Operating income (a) |
$ |
533 |
$ |
283 |
88.4 |
% |
$ |
1,193 |
$ |
458 |
160.5 |
% |
||||||||||
|
Operating income as a percentage of net revenues (a) |
20.9 |
% |
15.5 |
% |
5.4 |
% |
22.6 |
% |
12.5 |
% |
10.1 |
% |
||||||||||
|
Net income attributable to Quest Diagnostics (a) |
$ |
631 |
$ |
185 |
240.5 |
% |
$ |
1,100 |
$ |
284 |
287.0 |
% |
||||||||||
|
Diluted EPS (a) (b) |
$ |
4.96 |
$ |
1.36 |
264.2 |
% |
$ |
8.38 |
$ |
2.09 |
300.7 |
% |
||||||||||
|
Cash provided by operations |
$ |
460 |
$ |
355 |
30.1 |
% |
$ |
1,191 |
$ |
602 |
97.8 |
% |
||||||||||
|
Capital expenditures |
$ |
84 |
$ |
82 |
2.5 |
% |
$ |
170 |
$ |
165 |
2.9 |
% |
||||||||||
|
Adjusted (a): |
||||||||||||||||||||||
|
Operating income |
$ |
584 |
$ |
294 |
98.0 |
% |
$ |
1,292 |
$ |
519 |
148.8 |
% |
||||||||||
|
Operating income as a percentage of net revenues |
22.9 |
% |
16.1 |
% |
6.8 |
% |
24.5 |
% |
14.2 |
% |
10.3 |
% |
||||||||||
|
Net income attributable to Quest Diagnostics |
$ |
405 |
$ |
193 |
109.5 |
% |
$ |
913 |
$ |
321 |
184.3 |
% |
||||||||||
|
Diluted EPS (b) |
$ |
3.18 |
$ |
1.42 |
123.9 |
% |
$ |
6.96 |
$ |
2.36 |
194.5 |
% |
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|
(a) |
For further details impacting the year-over-year comparisons related to operating income, operating income as a percentage of net revenues, net income attributable to Quest Diagnostics, and diluted EPS, see note 2 of the financial tables attached below. |
|
(b) |
The sum of reported and adjusted diluted EPS for the first two quarters of 2021 did not equal the totals for the six months ended June 30, 2021 due to both quarterly fluctuations in the company’s earnings and in the weighted average common shares outstanding throughout the period as a result of the impact of accelerated share repurchase agreements (“ASRs”) that the company entered into during April 2021. |
Outlook for Full Year 2021
The company estimates its full year 2021 outlook as follows:
|
Low |
High |
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|
Net revenues |
$9.54 billion |
$9.79 billion |
||
|
Net revenues increase |
1.1% |
3.7% |
||
|
Reported diluted EPS |
$11.48 |
$12.18 |
||
|
Adjusted diluted EPS |
$10.65 |
$11.35 |
||
|
Cash provided by operations |
At least $1.9 billion |
|||
|
Capital expenditures |
Approximately $400 million |
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Note on Non-GAAP Financial Measures
As used in this press release the term “reported” refers to measures under accounting principles generally accepted in the United States (“GAAP”). The term “adjusted” refers to non-GAAP operating performance measures that exclude special items such as restructuring and integration charges, certain financial impacts resulting from the COVID-19 pandemic, amortization expense, excess tax benefits (“ETB”) associated with stock-based compensation, costs associated with donations, contributions, and other financial support through Quest for Health Equity, the company’s initiative with the Quest Diagnostics Foundation to reduce health disparities in underserved communities, a gain on sale of an ownership interest in a joint venture, and other items.
Non-GAAP adjusted measures are presented because management believes those measures are useful adjuncts to GAAP results. Non-GAAP adjusted measures should not be considered as an alternative to the corresponding measures determined under GAAP. Management may use these non-GAAP measures to evaluate our performance period over period and relative to competitors, to analyze the underlying trends in our business, to establish operational budgets and forecasts and for incentive compensation purposes. We believe that these non-GAAP measures are useful to investors and analysts to evaluate our performance period over period and relative to competitors, as well as to analyze the underlying trends in our business and to assess our performance. The additional tables attached below include reconciliations of non-GAAP adjusted measures to GAAP measures.
About Quest Diagnostics
Quest Diagnostics empowers people to take action to improve health outcomes. Derived from the world’s largest database of clinical lab results, our diagnostic insights reveal new avenues to identify and treat disease, inspire healthy behaviors and improve health care management. Quest annually serves one in three adult Americans and half the physicians and hospitals in the United States, and our nearly 50,000 employees understand that, in the right hands and with the right context, our diagnostic insights can inspire actions that transform lives. www.QuestDiagnostics.com.
