Why Is Quest Diagnostics (DGX) Up 3.1% Since Last Earnings Report?

Core Viewpoint - Quest Diagnostics reported a mixed performance in its Q1 2024 earnings, with adjusted earnings per share beating estimates but showing no year-over-year growth, while revenues increased slightly [2][4]. Financial Performance - Adjusted earnings per share for Q1 2024 were $2.04, exceeding the Zacks Consensus Estimate by 9.7%, but matching the previous year's figure [2]. - GAAP earnings were reported at $1.72 per share, reflecting a 3.4% decline from the same period last year [3]. - Revenues for the first quarter rose 1.5% year over year to $2.37 billion, surpassing the Zacks Consensus Estimate by 3.3% [4]. Revenue Breakdown - Diagnostic Information Services revenues increased by 1.7% year over year to $2.30 billion, outperforming the projected $2.21 billion [4]. - The volume of requisitions grew by 1.6% year over year, with revenue per requisition slightly up by 0.1% [4]. Margins and Expenses - The cost of services for the quarter was $1.60 billion, up 2.2% year over year, leading to a gross profit of $771 million, consistent with the previous year [5]. - Gross margin contracted by 49 basis points to 32.6%, while adjusted operating margin decreased by 25 basis points to 14% [5]. Cash and Capital Structure - At the end of Q1 2024, cash and cash equivalents stood at $474 million, down from $686 million at the end of 2023 [6]. - Cumulative net cash from operating activities increased to $154 million compared to $94 million at the end of Q1 2023 [6]. - The company has a five-year annualized dividend growth rate of 7.48% [6]. Guidance - For the full year 2024, Quest Diagnostics expects revenues between $9.40 billion and $9.48 billion, an increase from the previous guidance of $9.35 billion to $9.45 billion [7]. - Adjusted earnings per share guidance has been raised to a range of $8.72 to $8.97, up from $8.60 to $8.90 [7]. Market Sentiment - There has been a downward trend in estimates revisions for the stock over the past month [9]. - Quest Diagnostics currently holds a Zacks Rank 3 (Hold), indicating expectations for an in-line return in the coming months [11].