Summary
Quest Diagnostics Inc. (DGX) reported its financial results for the third quarter and the first nine months of 2019. The company demonstrated steady top-line growth, with total net revenues increasing by 3.5% year-over-year for the quarter, reaching $1.96 billion. This growth was primarily driven by its Diagnostic Information Services (DIS) segment, which saw a 3.7% revenue increase, fueled by a 5.1% rise in volume and contributions from recent acquisitions. Despite revenue growth, operating income saw a slight decrease of 1.5% for the nine-month period, largely due to increased costs and the impact of specific charges and gains. Diluted earnings per share from continuing operations remained relatively stable for the quarter but saw a slight decline for the nine-month period, influenced by various factors including amortization, restructuring charges, and tax impacts. Looking at the balance sheet, Quest Diagnostics reported total assets of $12.02 billion as of September 30, 2019, up from $11.00 billion at the end of 2018. This increase reflects the adoption of new lease accounting standards, resulting in significant operating lease right-of-use assets and liabilities. Cash and cash equivalents saw a substantial increase to $434 million from $135 million at the end of 2018, supported by strong operating cash flows. The company continued its capital allocation strategy, repurchasing shares and paying dividends, while also managing its debt obligations, which included a significant senior notes offering in March 2019.
Financial Highlights
57 data points| Revenue | $1.96B |
| Cost of Revenue | $1.26B |
| Gross Profit | $692.00M |
| SG&A Expenses | $362.00M |
| Operating Expenses | $1.64B |
| Operating Income | $313.00M |
| Interest Expense | $45.00M |
| Net Income | $215.00M |
| EPS (Basic) | $1.59 |
| EPS (Diluted) | $1.56 |
| Shares Outstanding (Basic) | 135.00M |
| Shares Outstanding (Diluted) | 137.00M |
Key Highlights
- 1Total net revenues for Q3 2019 increased by 3.5% to $1.96 billion, driven by the DIS segment's 3.7% revenue growth.
- 2DIS segment volume increased by 5.1% year-over-year in Q3 2019, with organic growth and acquisitions contributing to the rise.
- 3Income from continuing operations attributable to Quest Diagnostics' stockholders was $215 million ($1.56 per diluted share) for Q3 2019, compared to $213 million ($1.53 per diluted share) in the prior year.
- 4Net cash provided by operating activities for the first nine months of 2019 was $895 million, slightly down from $905 million in the prior year.
- 5The company adopted new lease accounting standards, significantly increasing operating lease right-of-use assets and liabilities on the balance sheet.
- 6Quest Diagnostics completed a $500 million senior notes offering in March 2019 to repay existing debt and for general corporate purposes.
- 7The company is actively engaged in its 'Invigorate' program aimed at reducing costs and improving performance, incurring $49 million in pre-tax charges for the nine-month period.