Summary
Quest Diagnostics (DGX) filed an 8-K on November 28, 2018, primarily disclosing details ahead of its Investor Day. Management outlined a strategic plan targeting shareholder value creation through 2022, projecting a compound annual growth rate (CAGR) for both revenues and adjusted diluted earnings per share (EPS) excluding amortization. The company detailed initiatives focused on strategic acquisitions, expanding insured lives, strengthening hospital partnerships, advancing diagnostic innovation, and enhancing its consumer lab services and diagnostic data offerings.
Key Highlights
- 1Quest Diagnostics anticipates a revenue and adjusted diluted EPS (excluding amortization) CAGR over the four years ending December 31, 2022.
- 2Strategic initiatives to drive growth include accretive acquisitions contributing over 2% revenue CAGR, leveraging access to over 43 million incremental insured lives, and strengthening hospital health system relationships.
- 3The company plans to achieve operational excellence and sustain annual cost savings of approximately 3%.
- 4Quest Diagnostics' capital deployment strategy prioritizes returning a majority of free cash flow to shareholders via share repurchases and dividends.
- 5For 2018, the company updated its guidance, expecting revenues of approximately $7.57 billion, reported diluted EPS greater than $5.34, and adjusted diluted EPS (excluding amortization) greater than $6.30.
- 62018 cash provided by operations is projected to be around $1.25 billion.
- 7The Board of Directors approved a 6% increase in the quarterly dividend to $0.53 per share, raising the annual rate to $2.12 per share.
Frequently Asked Questions
Quest Diagnostics provided projections for a compound annual growth rate (CAGR) for revenues and adjusted diluted earnings per share (excluding amortization) for the four-year period ending December 31, 2022. Specific CAGR figures were to be discussed at their Investor Day, but the company indicated that strategically aligned accretive acquisitions are expected to contribute over 2% to revenue CAGR.
The company's capital deployment strategy emphasizes returning a majority of its free cash flow to shareholders. This will be achieved through a combination of share repurchases and dividends. Additionally, the Board of Directors recently increased the quarterly dividend by 6% to $0.53 per share, an annual rate of $2.12.
Yes, Quest Diagnostics updated its 2018 financial expectations. The company now anticipates reported revenues of approximately $7.57 billion, reported diluted earnings per share greater than $5.34, and adjusted diluted earnings per share (excluding amortization) greater than $6.30. Cash provided by operations is expected to be around $1.25 billion.
Key strategic initiatives include driving growth through strategically aligned accretive acquisitions, capitalizing on expanded access to over 43 million incremental insured lives, strengthening relationships with hospital health systems, enhancing access to innovation in advanced diagnostics, improving its position as the consumer lab provider of choice, and extending diagnostic data services.