Quest Diagnostics posts higher-than-expected earnings

(Reuters) - Quest Diagnostics Inc (DGX.N) reported higher-than-expected quarterly earnings on Tuesday as sales increased slightly, and the maker of medical testing equipment said its board had authorized an increase in its stock buyback program, sending its shares up more than 6 percent.

The company said fourth-quarter earnings from continuing operations were $197 million, or $1.23 per share, compared with $179 million, or $1.03 per share, a year earlier.

On that basis, Wall Street had expected earnings of $1.06 per share.

Revenue rose 3 percent to $1.9 billion.

Quest forecast sales growth of 2 percent to 2.5 percent in 2012, and earnings of $4.40 to $4.55 per share.

"Revenue guidance of 2.0 percent to 2.5 percent, in our view, suggests expectations for stabilizing volume trends, while projected margin expansion is indicative of management's belief that cost savings initiatives will begin to bear fruit this year," Jefferies analyst Arthur Henderson wrote in a research note.

Quest said its board had authorized an increase in its share repurchases to $1.1 billion, analysts said.

Shares of Quest were up 6.1 percent at $59.92 on the New York Stock Exchange.

(Reporting By Debra Sherman; Editing by Maureen Bavdek and Lisa Von Ahn)