Financial Performance - Net revenues for the three months ended March 31, 2025, increased by 12.1% to $2,652 million compared to $2,366 million in the prior year period [114]. - Operating income for the three months ended March 31, 2025, was $346 million, a 15.4% increase from $300 million in the prior year [114]. - Net income attributable to Quest Diagnostics increased by 13.2% to $220 million, with diluted earnings per share rising to $1.94 from $1.72 [114][121]. Revenue Drivers - Diagnostic Information Services (DIS) revenues rose by 12.7% to $2,589 million, driven primarily by recent acquisitions contributing approximately 10.0% to DIS revenues [122][133]. - Requisition volume increased by 12.4%, with organic volume down by 0.9%, while revenue per requisition increased by 0.3% [114][133]. Cost and Expenses - Cost of services increased by $194 million, primarily due to recent acquisitions and wage increases, partially offset by cost savings from the Invigorate program [126]. - Selling, general and administrative expenses (SG&A) rose by $36 million, mainly driven by the impact of recent acquisitions [128]. - The Invigorate program aims to deliver 3% annual cost savings and productivity improvements to offset inflationary pressures [115]. Tax and Charges - The effective income tax rate decreased to 21.5% from 25.0%, benefiting from excess tax benefits associated with stock-based compensation arrangements [136]. - The company incurred $19 million in pre-tax charges related to restructuring and integration activities during the quarter [116]. Cash Flow and Investments - The company reported a net cash provided by operating activities of $314 million for the three months ended March 31, 2025, an increase of $160 million compared to $154 million in the same period of 2024 [149]. - Net cash used in investing activities decreased to $115 million for the three months ended March 31, 2025, from $213 million in the prior year, primarily due to reduced cash used for business acquisitions [151]. - Net cash used in financing activities increased to $561 million for the three months ended March 31, 2025, compared to $153 million in the same period of 2024, mainly due to the repayment of $600 million of senior notes [152]. Debt and Borrowing - As of March 31, 2025, the estimated fair value of the company's debt was approximately $5.8 billion, down from $6.1 billion as of December 31, 2024, with a fair value less than the carrying value by $59 million [139]. - The company had $1.1 billion of borrowing capacity available under existing credit facilities as of March 31, 2025, including $308 million under the secured receivables credit facility [164]. - As of March 31, 2025, the company had $215 million of borrowings outstanding under the secured receivables credit facility and no borrowings under the senior unsecured revolving credit facility [140]. Dividends and Shareholder Returns - The company declared a quarterly cash dividend of $0.80 per common share during the first quarter of 2025, up from $0.75 per share in each quarter of 2024 [155]. Operational Efficiency - Days sales outstanding improved to 47 days as of March 31, 2025, down from 50 days as of March 31, 2024, indicating enhanced billing and collection efficiency [150]. - The company is committed to a multi-year project ("Project Nova") aimed at modernizing its "Order-to-Cash" business processes, which is expected to deliver operational benefits and improve customer experience [163]. Capital Expenditures - The company expects to invest approximately $500 million in capital expenditures during 2025 to support and grow existing operations, particularly in laboratory equipment and facilities [162]. Interest Rate Swaps - The notional amount of fixed-to-variable interest rate swaps was $1.25 billion as of March 31, 2025, with an aggregate fair value in a liability position of $6 million [141]. - The fair value of fixed-to-variable interest rate swaps was $6 million in a liability position as of March 31, 2025, down from $34 million as of December 31, 2024 [141].

Core Insights - Quest Diagnostics Incorporated reported better-than-expected first-quarter earnings with earnings of $2.21 per share, surpassing the analyst consensus estimate of $2.15 per share [1] - The company achieved quarterly sales of $2.65 billion, exceeding the analyst consensus estimate of $2.63 billion [1] Financial Performance - In the first quarter, Quest Diagnostics experienced strong revenue growth of approximately 12%, including nearly 2.5% in organic growth, attributed to demand recovery in March [2] - The growth was driven by contributions from acquisitions, large enterprise accounts, demand for advanced diagnostics, and expanded health plan access [2] - The company reaffirmed its 2025 revenue guidance of $10.70 billion to $10.85 billion, compared to the consensus of $10.78 billion, and adjusted EPS guidance of $9.55 to $9.80, against the consensus of $9.68 [2] Stock Performance - Following the earnings announcement, Quest Diagnostics shares fell 0.1% to trade at $172.71 [3] - Analysts adjusted their price targets for Quest Diagnostics after the earnings report [3] Analyst Ratings - Baird analyst Eric Coldwell maintained an Outperform rating and raised the price target from $191 to $194 [7] - Evercore ISI Group analyst Elizabeth Anderson maintained an In-Line rating and increased the price target from $175 to $180 [7] - Barclays analyst Stephanie Davis maintained an Equal-Weight rating and raised the price target from $175 to $185 [7] - Truist Securities analyst David Macdonald maintained a Hold rating and increased the price target from $182 to $190 [7]

Core Viewpoint - Quest Diagnostics Inc reported strong first-quarter 2025 results, with sales and adjusted earnings exceeding consensus estimates, indicating robust demand and effective management strategies [1][2][4]. Financial Performance - First-quarter 2025 sales reached $2.65 billion, a 12.1% increase year over year, surpassing the consensus of $2.63 billion [1]. - Adjusted earnings per share (EPS) were $2.21, up 8.3%, beating the consensus of $2.15 [1]. - Adjusted operating income increased by 16.3% to $406 million, with operating margin improving from 14.8% to 15.3% [3]. Growth Drivers - The revenue growth was attributed to nearly 2.5% organic growth, contributions from acquisitions, demand for advanced diagnostics, and expanded health plan access [2]. - Requisition volume increased by 12.4%, while revenue per requisition rose by 0.3% [3]. Guidance and Outlook - The company reaffirmed its 2025 revenue guidance of $10.70 billion to $10.85 billion, compared to the consensus of $10.78 billion, and adjusted EPS guidance of $9.55 to $9.80, against a consensus of $9.68 [4]. - The acquisition of select assets from Fresenius Medical Care AG is expected to close in the second half of 2025, with service transitions anticipated to complete by early 2026 [4][5]. Strategic Initiatives - Quest Diagnostics will provide comprehensive laboratory services related to end-stage kidney disease for Fresenius Medical Care's dialysis centers [5]. - A partnership with GRAIL Inc. aims to enhance provider access to the Galleri multi-cancer early detection test through Quest's connectivity system [6]. Market Position - Analysts view the results as consistent with expectations, highlighting the company's resilience against macroeconomic factors and a favorable regulatory environment [7][8]. - Quest Diagnostics stock rose by 7.83% to $174.53 following the announcement [8].

Financial Data and Key Metrics Changes - In Q1 2025, consolidated revenues were $2.65 billion, up 12.1% year-over-year, with organic revenues growing by 2.4% [28] - Reported operating income was $346 million, representing 13% of revenues, compared to $300 million or 12.7% of revenues last year [31] - Reported EPS was $1.94, compared to $1.72 a year ago, while adjusted EPS was $2.21 versus $2.04 the prior year [32] Business Line Data and Key Metrics Changes - Revenues for Diagnostic Information Services increased by 12.7% year-over-year, driven by acquisitions and growth in physician and hospital channels [29] - Total volume measured by requisitions increased by 12.4% year-over-year, with organic volume down by 0.9% [29] - Revenue per requisition was up 0.3% year-over-year, with organic revenue per requisition increasing by 3.6% [30] Market Data and Key Metrics Changes - The physician channel saw revenue growth in the high teens, largely driven by acquisitions, with organic revenue growth in the mid-single digits [13] - Advanced diagnostics in key clinical areas such as cardiometabolic and autoimmune testing grew at double-digit rates [20] - The company expanded its health plan partnerships, contributing to revenue growth through access to new geographies [14] Company Strategy and Development Direction - The company’s growth strategy focuses on delivering solutions for core clinical customers and expanding into consumer-initiated testing, life sciences, and data analytics [11] - Automation, robotics, and AI are being deployed to improve quality and productivity [12] - The company aims to expand in high-growth areas and enhance its online consumer-initiated test platform [18] Management's Comments on Operating Environment and Future Outlook - Management reaffirmed revenue and adjusted EPS guidance for the full year 2025, expecting revenues between $10.7 billion and $10.85 billion [33] - The company anticipates approximately 3% organic revenue growth, with the remainder from acquisitions [35] - Management expressed optimism regarding the impact of recent regulatory changes and ongoing investments in quality management processes [10][36] Other Important Information - The company is collaborating with Google Cloud to streamline data management and enhance customer and employee experiences through GenAI [26] - The recent court ruling vacating the FDA rule on laboratory developed tests is expected to reduce regulatory costs and improve access to innovative testing services [9][10] Q&A Session Summary Question: Organic volume trends and expectations for the rest of the year - Management noted that organic volume was down 90 basis points but would have increased by 160 basis points when adjusting for leap year and weather impacts [42][43] Question: Exposure to tariffs and supply costs - Management indicated that less than 1% of their $2 billion supply spend is sourced directly from China, with most supplies manufactured in the U.S. [48][50] Question: Impact of strikes at LifeLabs - Management clarified that the strike is limited to British Columbia and is being managed effectively, with progress expected in the next 30 to 45 days [56][57] Question: Margin expectations for Q2 - Management expects Q2 to be the strongest quarter, with operating margins anticipated to grow compared to the previous year [60][62] Question: Opportunities in hospital lab management due to tariffs - Management indicated that the funnel of opportunities in collaborative lab services remains robust, with ongoing negotiations with several institutions [72] Question: Updates on Haystack and reimbursement submissions - Management reported positive progress with Haystack, with ongoing efforts to establish reimbursement processes [95][96] Question: Financial benefits from collaboration with Google Cloud - Management highlighted that moving data to the cloud will improve efficiency in data analytics and enhance customer and employee experiences [102][104] Question: Regulatory updates and potential cuts to Medicare and Medicaid - Management expressed optimism regarding Medicare Advantage rate increases and is closely monitoring potential Medicaid cuts, which represent about 8% of their business [107][110]

Core Viewpoint - Quest Diagnostics Inc. reported strong first-quarter 2025 results, with adjusted earnings per share (EPS) of $2.21, exceeding estimates and showing year-over-year growth [1][2][8] Financial Performance - Adjusted EPS of $2.21 beat the Zacks Consensus Estimate by 2.8% and increased by 8.3% compared to the previous year [1] - GAAP EPS was $1.94, reflecting a 12.8% increase from the same quarter last year [2] - Revenues rose 12.1% year over year to $2.65 billion, surpassing the Zacks Consensus Estimate by 1.5% [3] - Diagnostic Information Services revenues increased by 12.7% year over year to $2.59 billion, exceeding projections [3] - Volumes measured by requisitions were up 12.5% year over year, with revenue per requisition increasing by 0.3% [4] Margin and Cost Analysis - Cost of services was $1.79 billion, up 12.2% year over year, while gross profit reached $863 million, an 11.9% increase [5] - Gross margin stood at 32.5%, nearly unchanged from the previous year [5] - SG&A expenses were $476 million, an 8.1% increase from the first quarter of 2024 [5] - Adjusted operating margin improved by 60 basis points year over year to 14.6% [5] Liquidity and Financial Health - Cash and cash equivalents at the end of Q1 2025 were $188 million, down from $549 million at the end of Q4 2024 [6] - Cumulative net cash from operating activities was $314 million, compared to $154 million at the same time last year [6] - The company has a five-year annualized dividend growth rate of 7.17% [6] 2025 Guidance - Full-year 2025 revenue outlook is reaffirmed at $10.70 billion to $10.85 billion, indicating a year-over-year increase of 8.4% to 9.9% [7] - Adjusted EPS guidance remains unchanged at $9.55 to $9.80, with the Zacks Consensus Estimate at $9.68 [7] Market Reaction and Outlook - Following the earnings report, DGX shares gained nearly 6.7% in pre-market trading [2] - The growth in revenue was attributed to a rebound in demand, contributions from acquisitions, and expanded health plan access [8][9]

Core Viewpoint - Quest Diagnostics reported quarterly earnings of $2.21 per share, exceeding the Zacks Consensus Estimate of $2.15 per share, and showing an increase from $2.04 per share a year ago, indicating a positive earnings surprise of 2.79% [1] Financial Performance - The company achieved revenues of $2.65 billion for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 1.46%, and up from $2.37 billion in the same quarter last year [2] - Over the last four quarters, Quest Diagnostics has consistently exceeded consensus EPS estimates and revenue expectations [2] Stock Performance - Quest Diagnostics shares have increased approximately 7.3% since the beginning of the year, contrasting with a decline of 12.3% in the S&P 500 [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the market in the near future [6] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $2.53 on revenues of $2.68 billion, and for the current fiscal year, it is $9.68 on revenues of $10.76 billion [7] - The trend of estimate revisions for Quest Diagnostics is mixed, which may change following the recent earnings report [6] Industry Context - The Medical - Outpatient and Home Healthcare industry, to which Quest Diagnostics belongs, is currently ranked in the top 8% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [8]

Financial Performance - First quarter revenues reached $2.65 billion, representing a 12.1% increase compared to 2024[3] - Reported diluted EPS for the first quarter was $1.94, up 12.8% from 2024; adjusted diluted EPS was $2.21, an increase of 8.3%[3] - Operating income for the first quarter was $346 million, a 15.4% increase from the previous year, with operating income as a percentage of net revenues at 13.0%[2] - Net income for the three months ended March 31, 2025, was $235 million, an increase of 12.99% compared to $208 million in the same period of 2024[20] - Adjusted diluted EPS for the three months ended March 31, 2025, was $2.21, compared to $1.72 in the same period of 2024, reflecting a 28.49% increase[21] Revenue Guidance - The company reaffirmed its full year 2025 revenue guidance, expecting net revenues between $10.70 billion and $10.85 billion, reflecting an increase of 8.4% to 9.9%[4] - The company anticipates full year 2025 reported diluted EPS to be between $8.62 and $8.87, and adjusted diluted EPS to remain between $9.55 and $9.80[3] - The outlook for adjusted diluted EPS for the full year 2025 is estimated to be between $9.55 and $9.80[23] Cash Flow and Operations - Cash provided by operations for the first quarter was $314 million, a significant increase of 103.4% compared to 2024[2] - Net cash provided by operating activities increased to $314 million, up from $154 million year-over-year, representing a growth of 103.9%[20] - The company reported a net cash used in investing activities of $115 million, a decrease from $213 million in the prior year[20] Capital Expenditures - Capital expenditures for the first quarter totaled $117 million, an increase of 11.9% from the previous year[2] - Total capital expenditures for the three months ended March 31, 2025, were $117 million, compared to $104 million in the same period of 2024[20] Assets and Liabilities - Total assets as of March 31, 2025, were $15.80 billion, down from $16.15 billion at the end of 2024[17] - Cash and cash equivalents at the end of the period decreased to $188 million from $474 million, a decline of 60.4%[20] Other Expenses - The company incurred $19 million in restructuring and integration charges during the three months ended March 31, 2025[22] - Estimated pre-tax amortization expenses for the full year 2025 are projected to be $160 million[26] Operational Metrics - Diagnostic Information Services revenues for the first quarter were $2.59 billion, up 12.7% from 2024[2] - Requisition volume increased by 12.4% in the first quarter, although organic requisition volume saw a slight decline of 0.9%[2]

Core Insights - Quest Diagnostics reported strong revenue growth of approximately 12% in Q1 2025, driven by demand recovery and contributions from acquisitions [2][7] - The company reaffirmed its revenue and adjusted EPS guidance for the full year 2025 [2] Financial Performance - Net revenues for Q1 2025 were $2.652 billion, up from $2.366 billion in Q1 2024, representing a 12.1% increase [2][12] - Diagnostic Information Services revenues increased by 12.7% to $2.589 billion [2][12] - Operating income rose to $346 million, a 15.4% increase from $300 million in the previous year [2][12] - Net income attributable to Quest Diagnostics was $220 million, up 13.2% from $194 million [2][12] - Diluted EPS for Q1 2025 was $1.94, reflecting a 12.8% increase from $1.72 in Q1 2024 [2][12] Operational Metrics - Requisition volume increased by 12.4%, while organic requisition volume decreased by 0.9% [2] - Revenue per requisition saw a slight increase of 0.3% [2] Updated Guidance for 2025 - The updated guidance for net revenues is projected between $10.70 billion and $10.85 billion, indicating an increase of 8.4% to 9.9% [3] - Reported diluted EPS is expected to range from $8.62 to $8.87, while adjusted diluted EPS remains between $9.55 and $9.80 [3][7] - Cash provided by operations is anticipated to be approximately $1.5 billion, with capital expenditures around $500 million [3] Cash Flow and Capital Expenditures - Cash provided by operations in Q1 2025 was $314 million, a significant increase of 103.4% from $154 million in Q1 2024 [2][16] - Capital expenditures for the quarter were $117 million, up 11.9% from $104 million [2][16] Balance Sheet Highlights - As of March 31, 2025, total assets were $15.797 billion, down from $16.153 billion at the end of 2024 [14] - Current liabilities decreased to $1.441 billion from $2.169 billion [14] - Total stockholders' equity increased to $6.962 billion from $6.813 billion [14]

Core Viewpoint - The market anticipates Quest Diagnostics (DGX) will report a year-over-year increase in earnings driven by higher revenues for the quarter ended March 2025, with actual results being crucial for stock price movement [1][2]. Earnings Expectations - Quest Diagnostics is expected to post quarterly earnings of $2.16 per share, reflecting a year-over-year increase of +5.9% [3]. - Revenues are projected to reach $2.62 billion, representing a 10.6% increase from the same quarter last year [3]. Estimate Revisions - The consensus EPS estimate has been revised down by 0.13% over the last 30 days, indicating a reassessment by analysts [4]. - The Most Accurate Estimate for Quest Diagnostics is lower than the Zacks Consensus Estimate, leading to an Earnings ESP of -2.11%, suggesting a bearish outlook from analysts [10][11]. Earnings Surprise Prediction - The Zacks Earnings ESP model indicates that a positive or negative reading can predict the likelihood of actual earnings deviating from consensus estimates, with positive readings being more reliable [6][7]. - Stocks with a positive Earnings ESP and a Zacks Rank of 1, 2, or 3 have historically shown a nearly 70% chance of delivering a positive surprise [8]. Historical Performance - In the last reported quarter, Quest Diagnostics exceeded the expected earnings of $2.19 per share by delivering $2.23, resulting in a surprise of +1.83% [12]. - The company has beaten consensus EPS estimates in all of the last four quarters [13]. Conclusion - Despite the potential for an earnings beat, Quest Diagnostics does not currently appear to be a strong candidate for exceeding earnings expectations, and investors should consider other influencing factors before making investment decisions [16].

Core Viewpoint - Quest Diagnostics (DGX) is expected to report its first-quarter 2025 results on April 22, with a focus on revenue growth and earnings performance, following a solid performance in 2024 [1][4]. Group 1: Financial Performance - The Zacks Consensus Estimate for Quest Diagnostics' revenues in Q1 2025 is $2.62 billion, reflecting a 10.6% increase from the previous year [2]. - The estimated EPS for Q1 2025 is projected at $2.16, indicating a 5.9% increase compared to the same quarter last year [2]. - Adjusted EPS in the last reported quarter was $2.23, exceeding the Zacks Consensus Estimate by 1.83%, with an average surprise of 3.75% over the last four quarters [1][3]. Group 2: Factors Influencing Performance - The Diagnostic Information Services (DIS) segment is anticipated to show strong growth due to increased utilization of Advanced Diagnostics, particularly in clinical areas [4]. - Demand for AD-detect blood tests for Alzheimer's risk assessment is expected to drive growth in Brain Health, while Women's Health may benefit from prenatal and hereditary genetic testing [4]. - Growth in advanced cardiometabolic and autoimmune testing, along with increased adoption of self-collection options for genital tract infections, is also anticipated [5]. Group 3: Strategic Developments - Recent acquisitions, including assets from University Hospitals, are likely to enhance Quest Diagnostics' test menu and patient access in Ohio [6]. - The company is expected to see revenue growth from new customer wins and expansion among large physician groups and community health centers [6]. - Medicare Advantage plans are projected to contribute to strong volume and revenue growth, supported by partnerships with Elevance Health and Sentara Health Plans [7]. Group 4: Operational Insights - Strategic investments in automation and AI are expected to improve quality, customer experience, and productivity [9]. - The company's operating income (non-GAAP basis) is projected to increase by 5% year over year in Q1 2025 [10].