On October 22, 2024 Quest Diagnostics Incorporated (NYSE: DGX), a leading provider of diagnostic information services, reported financial results for the third quarter ended September 30, 2024 (Press release, Quest Diagnostics, OCT 22, 2024, View Source [SID1234647310]).
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"We delivered a strong third quarter, with total revenue growth of 8.5%, including 4.2% organic growth," said Jim Davis, Chairman, CEO and President. "Our performance was driven by new customer wins and expanded business with physicians and hospitals as well as recent acquisitions, including LifeLabs. We are now on track to complete eight acquisitions by year’s end that meet our criteria for profitability, growth and returns."
"We have increased our 2024 revenue guidance due to contributions from recent acquisitions and have maintained the midpoint of our adjusted EPS guidance despite the impact of Hurricane Milton in the fourth quarter," Mr. Davis continued. "Given the strength of our business and revenue from acquisitions, we are well positioned to drive accelerated revenue and earnings growth in 2025."
Three Months Ended September 30,
Nine Months Ended September 30,
2024
2023
Change
2024
2023
Change
(dollars in millions, except per share data)
Reported:
Net revenues
$ 2,488
$ 2,295
8.5 %
$ 7,251
$ 6,964
4.1 %
Diagnostic Information Services revenues
$ 2,427
$ 2,228
9.0 %
$ 7,058
$ 6,755
4.5 %
Revenue per requisition
3.3 %
1.7 %
Requisition volume
5.5 %
2.7 %
Organic requisition volume
0.5 %
0.7 %
Operating income (a)
$ 330
$ 342
(3.3) %
$ 985
$ 995
(1.0) %
Operating income as a percentage of net revenues (a)
13.3 %
14.9 %
(1.6) %
13.6 %
14.3 %
(0.7) %
Net income attributable to Quest Diagnostics (a)
$ 226
$ 225
0.5 %
$ 649
$ 662
(1.9) %
Diluted EPS (a)
$ 1.99
$ 1.96
1.5 %
$ 5.74
$ 5.79
(0.9) %
Cash provided by operations
$ 356
$ 207
72.5 %
$ 870
$ 745
17.0 %
Capital expenditures
$ 106
$ 105
1.0 %
$ 302
$ 336
(10.4) %
Adjusted (a):
Operating income
$ 385
$ 380
1.3 %
$ 1,132
$ 1,119
1.1 %
Operating income as a percentage of net revenues
15.5 %
16.6 %
(1.1) %
15.6 %
16.1 %
(0.5) %
Net income attributable to Quest Diagnostics
$ 262
$ 254
3.1 %
$ 758
$ 749
1.2 %
Diluted EPS
$ 2.30
$ 2.22
3.6 %
$ 6.70
$ 6.56
2.1 %
(a)
For further details impacting the year-over-year comparisons related to operating income, operating income as a percentage of net revenues, net income attributable to Quest Diagnostics, and diluted EPS, see note 2 of the financial tables attached below.
Updated Guidance for Full Year 2024
The company updates its full year 2024 guidance as shown in the table below. The updated guidance reflects the impact of recent acquisitions including LifeLabs as well as the impact from Hurricane Milton in the fourth quarter. The company projects the disruption from Hurricane Milton to negatively impact net revenues by approximately $15 million and EPS by approximately 8 cents in the fourth quarter.
Updated Guidance
Prior Guidance
Low
High
Low
High
Net revenues
$9.80 billion
$9.85 billion
$9.50 billion
$9.58 billion
Net revenues increase
5.9 %
6.5 %
2.7 %
3.5 %
Reported diluted EPS
$7.60
$7.70
$7.57
$7.77
Adjusted diluted EPS
$8.85
$8.95
$8.80
$9.00
Cash provided by operations
Approximately $1.3 billion
Approximately $1.3 billion
Capital expenditures
Approximately $420 million
Approximately $420 million