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]

Quest Diagnostics (DGX) Q1 2025 Earnings Call April 22, 2025 08:30 AM ET Company Participants Shawn Bevec - VP of IRJames Davis - Chairman, CEO & PresidentSam Samad - Executive VP & CFOKevin Caliendo - Managing DirectorPatrick Donnelly - Managing DirectorNoah Kava - Equity Research AssociateMichael Ryskin - Managing Director Conference Call Participants Luke Sergott - AnalystElizabeth Anderson - AnalystMichael Cherny - Senior Managing Director & Senior Research AnalystPito Chickering - AnalystDavid Westenbe ...

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].

Core Viewpoint - Quest Diagnostics has launched a new laboratory blood test, AD-Detect™ Abeta 42/40 and p-tau217 Evaluation, which can accurately assess Alzheimer's disease pathology with over 90% sensitivity and specificity, aimed at confirming amyloid brain pathology in patients with mild cognitive impairment or dementia [1][2]. Test Details - The AD-Detect test combines blood levels of amyloid beta (AB) 42/40 and p-tau217, producing an AD-Detect Likelihood Score™ through a proprietary algorithm validated with a cohort from the 1Florida Alzheimer's Disease Research Center [2]. - This test builds on previous AD-Detect tests that assessed individual biomarkers, now providing a more comprehensive evaluation of amyloid brain pathology [3]. Clinical Implications - The test demonstrates a positive predictive value (PPV) and negative predictive value (NPV) of 89% in a population with mild cognitive impairment, with improved predictive values when including ApoE genetic risk marker [6]. - The test's reliability is supported by a heterogeneous population with a low prevalence of beta amyloid PET positivity, indicating its effectiveness in real-world scenarios [6]. Market Position - Quest's AD-Detect suite offers a range of validated blood-based biomarkers, enhancing personalized testing options for providers [4]. - The new test aims to provide scalable, high-volume solutions for Alzheimer's evaluation, potentially reducing the need for more invasive and costly diagnostic methods like PET imaging and lumbar puncture [8]. Access and Availability - The test is available for physicians in the United States, except New York, with blood draws conducted through Quest's extensive network of approximately 8,000 patient access points [10][14]. - Quest Diagnostics serves a significant portion of the U.S. population, with nearly 55,000 employees dedicated to improving health outcomes through diagnostic insights [13]. Industry Context - Nearly 7 million Americans currently have Alzheimer's, a number projected to reach 14 million by 2060, highlighting the growing need for effective diagnostic solutions [11]. - A significant majority of physicians believe that new therapies will transform Alzheimer's into a manageable disease, and they favor blood tests as a more cost-effective alternative to traditional diagnostic methods [11].

Core Insights - Quest Diagnostics has launched a new FDA-cleared HPV self-collection solution to enhance access to HPV screening, aiming to identify women at risk of cervical cancer [1][4][5] - The self-collection option will be available in physician offices and at 2,000 Quest patient service centers across the United States starting next month [2][3] - The initiative follows the successful introduction of self-collection services for other STIs in October 2024, indicating strong demand for discreet self-collection options [2][4] Company Strategy - The new self-collection service allows patients to collect specimens privately, which may help reduce barriers to screening and increase participation among women who might otherwise avoid traditional methods [5][6] - Quest Diagnostics emphasizes the importance of providing options for patients who may feel uncomfortable with clinician-collected tests due to various personal factors [6][7] - The company aims to address the significant decline in cervical cancer screenings, with 4.4 million fewer American women screened in 2021 compared to 2019, and a 1.7% increase in cervical cancer incidence among women aged 30-44 during the same period [6][7] Industry Context - The self-collection method is recognized for its accuracy and potential to increase screening rates in historically underscreened populations, aligning with recent guidelines from the United States Preventive Services Task Force [6][7] - The initiative reflects a broader trend in the healthcare industry towards empowering patients and improving access to preventive care [4][6]

Financial Results Announcement - Quest Diagnostics will report its first quarter 2025 financial results on April 22, 2025, before the market opens [1] - A quarterly conference call to discuss the results will begin at 8:30 a.m. Eastern Time on the same day [1] Conference Call Access - The conference call can be accessed by dialing 888-455-0391 within the U.S. and Canada, or 773-756-0467 internationally, using the passcode "7895081" [2] - Participants are advised to dial in approximately 10 minutes before the call [2] Replay Information - A replay of the call will be available online and by phone, with telephone replays accessible from approximately 10:30 a.m. Eastern Time on April 22, 2025, until midnight Eastern Time on May 6, 2025 [3] Company Overview - Quest Diagnostics provides diagnostic insights from laboratory testing to improve health outcomes, serving one in three adult Americans and half of the physicians and hospitals in the U.S. [5] - The company employs over 55,000 individuals and utilizes one of the world's largest databases of de-identifiable clinical lab results to inspire actions that transform lives [5]