Quest Diagnostics 3Q profit falls 5 percent
MADISON, N.J. (AP) — Quest Diagnostics Inc.'s third-quarter earnings slipped 5 percent, as restructuring costs and a drop in clinical testing revenue hurt the medical laboratory operator's performance.
The Madison, N.J., company said last week that it will cut 400 to 600 management positions and reorganize its business into two units: diagnostic information services and diagnostic solutions. The company, which has around 42,000 employees, expects to save $65 million a year from the changes.
The reorganization will take effect by Jan. 1, and job cuts will be complete by the end of 2013.
Quest said Wednesday that it took a charge of 17 cents per share in the quarter for restructuring and integration costs.
Overall, the company earned $163.1 million, or $1.01 per share, in the three months that ended Sept. 30. That compared with net income of $171.8 million, or $1.07 per share, in last year's quarter. Not counting the restructuring charge, Quest earned $1.18 per share.
Revenue fell 3 percent to $1.85 billion.
Analysts surveyed by FactSet expected, on average, earnings of $1.18 per share on $1.91 billion in sales.
Quest's shares fell more than 3 percent, or $2.02, to $61.35 in pre-market trading. The stock closed Tuesday at $63.37, up about 9.2 percent for the year.
The company on Wednesday also lowered the top end of its 2012 earnings forecast range and its revenue expectation. It now expects earnings of between $4.45 and $4.55 per share, compared with its prior prediction of $4.45 to $4.60 per share.
It also forecasted revenue growth of about a half percent, down from its previous estimate for between 1 percent and 2 percent. The new figure would equate to revenue of about $7.89 billion for the year.
Analysts expect, on average, earnings of $4.56 per share, on $7.64 billion in revenue.
Quest provides diagnostic testing through a network of laboratories and patient service centers, and it also offers consultation through its medical and scientific staff.