On March 16, 2023 Quest Diagnostics reported at a meeting with analysts and investors at its Investor Day, members of the executive leadership team of Quest Diagnostics Incorporated (NYSE: DGX), the world’s leading provider of diagnostic information services, will discuss the company’s priorities to grow revenues and create shareholder value (Press release, Quest Diagnostics, MAR 16, 2023, View Source [SID1234628936]). The company is also updating its long-term financial outlook to extend from 2023 through 2026.
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Quest Diagnostics Incorporated logo. (PRNewsFoto/Quest Diagnostics Incorporated)
"We have made refinements to our strategy to accelerate growth from our physician and hospital customers, and are building strong platforms to win in the important areas of molecular genomics and oncology as well as consumer health," said Jim Davis, CEO and President. "In addition, we have a range of initiatives underway to continue to drive operational productivity while further improving the customer experience. For the 2023 through 2026 period, we expect to generate revenues at a mid single-digit CAGR and adjusted EPS at a high single-digit CAGR."
At the meeting, members of the company’s executive leadership team will highlight strategic initiatives underway to drive growth, including:
Building on the company’s strong position in physician lab services by partnering with health plans as well as expanding value-based care and retail relationships;
Achieving growth with hospitals by expanding reference capabilities, enhancing Professional Lab Services offerings and acquiring outreach laboratory testing services;
Growing in the consumer health market through direct sales, menu expansion and partnerships;
Increasing share in advanced diagnostics through ongoing investments in molecular genomics and oncology; and
Delivering 3% annual savings and productivity improvements by executing the company’s Invigorate program, which includes leveraging automation and artificial intelligence, reducing denials and write-offs, enhancing the digital experience, and selecting and retaining talent.
The company will also discuss its capital deployment strategy at the meeting.
Mr. Davis continued: "Quest’s nearly 50,000 employees are united by our common purpose, which is: Working together to create a healthier world, one life at a time. They certainly brought our purpose to life during the pandemic and live it every day. Inspired by our employees, we recently introduced this new purpose, which serves as a compass for our business strategy evolution, growth and culture."
Guidance for Full Year 2023
The Company’s guidance for 2023 remains unchanged as follows:
Low
High
Net revenues
$8.83 billion
$9.03 billion
Net revenues decrease
(10.7) %
(8.6) %
Base business revenues (a)
$8.65 billion
$8.75 billion
Base business revenues increase
2.6 %
3.8 %
COVID-19 testing revenues
$175 million
$275 million
COVID-19 testing revenues decrease
(88.0) %
(81.1) %
Reported diluted EPS
$7.61
$8.21
Adjusted diluted EPS
$8.40
$9.00
Cash provided by operations
At least $1.3 billion
Capital expenditures
Approximately $400 million
(a) excludes COVID-19 testing
The additional table attached below includes reconciliations of non-GAAP adjusted measures to GAAP measures.
*Note on Non-GAAP Financial Measures
As used in this press release the term "reported" refers to measures under accounting principles generally accepted in the United States ("GAAP"). The term "adjusted" refers to non-GAAP operating performance measures that exclude special items such as restructuring and integration charges, amortization expense, and excess tax benefits ("ETB") associated with stock-based compensation.
The company has provided a compound annual growth rate projection for 2023 to 2026 of high single-digits for adjusted diluted EPS, which is a non-GAAP measure. The company is unable to present a reconciliation of adjusted diluted EPS to reported diluted EPS, the most comparable GAAP measure due to the inherent uncertainty and variability in the nature and amount of special items referenced above, and the amount of these items could be significant in any of the associated periods.
Non-GAAP adjusted measures are presented because management believes those measures are useful adjuncts to GAAP results. Non-GAAP adjusted measures should not be considered as an alternative to the corresponding measures determined under GAAP. Management may use these non-GAAP measures to evaluate our performance period over period and relative to competitors, to analyze the underlying trends in our business, to establish operational budgets and forecasts and for incentive compensation purposes. We believe that these non-GAAP measures are useful to investors and analysts to evaluate our performance period over period and relative to competitors, as well as to analyze the underlying trends in our business and to assess our performance.
Participating in Investor Day
Advance registration is required. To register for the event, please go to: Quest Diagnostics Investor Day 2023 Registration.
A live webcast of the event will be broadcast on the Quest Diagnostics Investor Relations website.
A copy of the presentation materials discussed at the meeting and an archived copy of the webcast will be available on the Quest Diagnostics Investor Relations website.