Oct 17 Quest Diagnostics Inc slashed its
full-year earnings forecast as the laboratory tests provider
struggles with cuts to Medicare reimbursements and a decline in
Quest, which just last week estimated third-quarter profit
well below market expectations, cut its earnings forecast for
the year to $3.85-$3.95 per share from $4.35-$4.50.
Analysts were expecting earnings of $4.23 per share,
according to Thomson Reuters I/B/E/S.
"We're not surprised because there's a new CFO. We think ...
it's prudent for him to bring guidance down to a range that they
feel is much more reasonable," Maxim Group analyst Anthony
Vendetti told Reuters.
Shares in the company, which named Mark Guinan as chief
financial officer in July, fell 1.8 percent.
Quest and rival Laboratory Corp of America Holdings
have been hurting all year due to government cuts to
reimbursement rates for certain diagnostics tests and fewer
tests being ordered as people put off elective procedures in a
The companies have also been losing business as the hospital
operators that buy physician practices order testing to be done
Quest said it expected full-year revenue to fall about 3.5
percent from a year earlier, bigger than its earlier forecast of
a 1-2 percent decline. The company reported net revenue of $7.38
billion in 2012.
The company reported adjusted earnings from continuing
operations of $1.02 per share on revenue of $1.79 billion for
the third quarter, in line with numbers it estimated last week.
Quest said test volume, measured by the number of
requisitions, rose 2 percent in the quarter. Revenue per
requisition fell 4.3 percent, mainly due to the reimbursement
Net income from continuing operations rose to $402.7 million
in the three months ended Sept. 30, as the company gained about
$300 million after tax from the sale of royalty rights for an
experimental cancer drug to Royalty Pharma.
Shares of the company traded at $57.67 in early trade on the
New York Stock Exchange.