(Updates with closing share price in second paragraph.)
Oct. 25 (Bloomberg) -- Quest Diagnostics Inc., the biggest U.S. operator of medical labs, rose the most in nine years after it raised the lower end of its forecast and said a successor is being sought for Chief Executive Officer Surya Mohapatra.
Quest climbed 11 percent to $56.50 at 4 p.m. New York time, the most since October 2002. Full-year earnings excluding one- time items will be $4.30 to $4.35 a share, the Madison, New Jersey-based company said in a statement. In July, Quest forecast $4.25 to $4.35 a share.
Quest raised the forecast after the acquisitions of Athena Diagnostics Inc. and Celera Corp. within the last year helped increase third-quarter revenue. Mohapatra, 62, said he would step down after 12 years with the company.
“Some of the investments made under his leadership have turned out to be controversial,” said Thomas Gallucci, a managing director and senior health-care services analyst at New York-based Lazard Capital Markets, in a note today. “Investor sentiment will likely greet news of change favorably.”
Mohapatra will stay on as chairman and CEO for six months to help with the transition to a new leader, Daniel Stanzione, the company’s lead independent director, said in a separate statement. No further details were provided.
“The Board and I agreed that this is the right time to transition to new leadership,” Mohapatra said in the statement
Third-quarter revenue rose 2.2 percent to $1.91 billion. Net income dropped 13 percent to $171.8 million, or $1.07 a share. Earnings excluding certain items were $1.18 a share, beating by 7 cents the estimate of analysts surveyed by Bloomberg.
--Editors: Bruce Rule, Reg Gale
To contact the reporter on this story: Drew Armstrong in Washington at firstname.lastname@example.org
To contact the editor responsible for this story: Bruce Rule at email@example.com