Quest Diagnostics Incorporated
DGX
recently announced preliminary financial results for the fourth quarter and full-year 2021. Following the announcement of preliminary results, the company’s shares fell 6.8% to $147.14 at the session’s close on Jan 12.
The company is scheduled to report fourth-quarter and full-year financial results on Feb 3, 2022.
Per the preliminary announcement, Quest Diagnostics, a leading provider of diagnostic information services, anticipates fourth-quarter 2021 reported revenues at around $2.74 billion (down 9% from the year-ago $3.00 billion). The Zacks Consensus Estimate for its fourth-quarter 2021 revenues is pegged at $2.51 billion, 9.2% below the preliminary figure.
Total volume, measured by the number of requisitions, is expected to increase around 1.3% in the fourth quarter of 2021 from the prior year. Total base testing volumes (excluding COVID-19 testing) are projected to increase by around 10% compared to the year-ago period, representing a pre-pandemic baseline. COVID-19 testing volumes in the fourth quarter, which included around 7.9 million molecular tests and 0.7 million serology tests, are expected to decline compared to the prior year.
The company’s preliminary adjusted earnings per share (EPS) for the fourth quarter of 2021 is $3.33 (suggesting a drop of 34.5% from the year-ago $4.48). The Zacks Consensus Estimate for the same is pegged 4.7% lower at $3.18.
2021 Results
Quest Diagnostics expects full-year 2021 reported revenues of $10.79 billion (suggesting an increase of 14% from the year-ago $9.44). The Zacks Consensus Estimate for the same is pegged at $10.68 billion, 1% below the preliminary figure.
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The company’s adjusted diluted EPS for full-year 2021 is expected to be $14.24 (indicating an increase of 27.4% from the year-ago $11.18). The Zacks Consensus Estimate for the metric is pegged at $14.10, 0.9% below the preliminary figure.
Highlights
Quest Diagnostics noted that the fourth-quarter results reflect higher-than-expected demand for COVID-19 testing services. In contrast, base testing volumes remained steady and consistent with the company’s earlier outlook shared on Oct 21, 2021.
The company also noted that full-year 2021 results are expected to exceed the company’s outlook shared on Oct 21, 2021. The 2021 performance reflects an increase in COVID-19 testing services and a steady recovery in the company’s base testing volumes throughout 2021.
2022 Guidance Updated
The company now projects that it will exceed adjusted diluted EPS of $8.00 in 2022 (earlier projection was expected to be near the high end of $7.40 to $8.00). The Zacks Consensus Estimate for the same is pegged at $8.70.
The above-mentioned growth outlook takes into account higher than the anticipated current demand for COVID-19 testing services, expected growth in the base business and the recently announced one-year delay of PAMA cuts, partially offset by inflation, higher labor costs, and investments to accelerate growth.
The company will furnish further details with respect to its 2022 financial outlook in the fourth-quarter earnings update.
Price Performance
Shares of the company have gained 17.3% in a year against the
industry
‘s decline of 43.1%.
Zacks Rank and Key Picks
Quest Diagnostics currently carries a Zacks Rank #3 (Hold). You can see
the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
A few better-ranked stocks in the broader medical space that investors can consider are
AMN Healthcare Services, Inc.
AMN
,
Apollo Endosurgery, Inc.
APEN
and
Laboratory Corporation of America Holdings
LH
.
AMN Healthcare, carrying a Zacks Rank #1, has a long-term earnings growth rate of 16.2%. The company surpassed earnings estimates in the trailing four quarters, delivering a surprise of 19.5%, on average.
AMN Healthcare has outperformed its industry over the past year. AMN has gained 50.1% versus the 54.9% industry decline.
Apollo Endosurgery, carrying a Zacks Rank #2 (Buy), has a long-term earnings growth rate of 7%. The company‘s earnings surpassed estimates in the trailing four quarters, delivering a surprise of 25.6%, on average.
Apollo Endosurgery has outperformed its industry in the past year. APEN has gained 91.7% against the industry’s 0.7% fall.
Laboratory Corporation surpassed earnings estimates in each of the trailing four quarters, the average surprise being 25.7%. The company currently sports a Zacks Rank #1.
Laboratory Corporation’s long-term earnings growth rate is estimated at 10.6%. The company’s earnings yield of 9.4% compares favorably with the industry’s 3.4%.
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