On September 9, 2021 Quest Diagnostics Incorporated (NYSE: DGX), the world’s leading provider of diagnostic information services, reported its financial outlook for full year 2021 (Press release, Quest Diagnostics, SEP 9, 2021, View Source [SID1234587568]).
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Since the company reported its financial performance for the second quarter of 2021 on July 22, 2021, COVID-19 molecular testing volumes were stronger than anticipated through the end of August and are expected to continue to be stronger than anticipated because of the surge of the Delta variant. The low end of the company’s outlook now assumes average COVID-19 volumes of at least 40,000 molecular tests per day for the second half of the year. Organic testing volumes in the company’s base business (excluding COVID-19 molecular and antibody testing and the impact of recent acquisitions) remain consistent with its previous outlook.
Updated Outlook for Full Year 2021
The company revised its full year 2021 outlook as follows:
The company is scheduled to participate in the Morgan Stanley 19th Annual Global Healthcare Conference today at 9:30 a.m. Eastern Time. The presentation will be webcast live during the conference and will be available on the company’s investor relations page which can be accessed at ir.QuestDiagnostics.com. During the discussion, the company’s management plans to discuss the company’s vision, goals and two-point strategy to accelerate growth and drive operational excellence, as well as the company’s current perspective on the impact of the COVID-19 pandemic.
Management continues to believe that the COVID-19 pandemic’s impact on its future operating results, cash flows and/or financial condition will be primarily driven by a number of factors beyond the company’s knowledge and control, including: the pandemic’s severity and duration; healthcare insurer, government, and client payer reimbursement rates for COVID-19 molecular tests; the pandemic’s impact on the U.S. healthcare system and the U.S. economy; and the timing, scope and effectiveness of federal, state and local governmental responses to the pandemic including the impact of vaccination efforts.
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, certain financial impacts resulting from the COVID-19 pandemic, amortization expense, excess tax benefits ("ETB") associated with stock-based compensation, costs associated with donations, contributions and other financial support through Quest for Health Equity, the company’s initiative with the Quest Diagnostics Foundation to reduce health disparities in underserved communities, a gain on the sale of an ownership interest in a joint venture and other items.
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. The additional table attached below includes a reconciliation of non-GAAP adjusted measures to GAAP measures.