Quest Raises Outlook as Testing Volumes Accelerate
Adjusted earnings rose 19.1% to $3.12 a share in the second quarter.
Quest Diagnostics (DGX), the diagnostic-testing provider, posted faster second-quarter revenue growth as rising test volumes outweighed weaker revenue per requisition.
Organic requisition-volume growth accelerated for a third consecutive quarter, reaching 13.0% from 10.8% in the first quarter and 7.9% in the fourth quarter of 2024. The gains helped organic revenue growth rise to 10.0% from 9.0% in the prior quarter.
Net revenue rose 10.2% from a year earlier to $3.043 billion, accelerating from first-quarter growth of 9.2%. Reported diluted earnings increased 15.0% to $2.84 a share, while adjusted earnings growth quickened from 13.1% in the first quarter.
The expansion remained volume-led. Requisition volume rose 13.1%, while revenue per requisition fell 2.8%; in the first quarter, those measures had increased 10.9% and declined 1.3%, respectively. Diagnostic Information Services revenue advanced 10.3% to $2.978 billion, faster than its 9.4% first-quarter pace.
Higher revenue did not fully carry through to margins. Adjusted operating income rose 7.8% to $502 million, while the adjusted operating margin narrowed 0.4 percentage point from a year earlier to 16.5%. The margin improved sequentially from 15.4% in the first quarter.
Quest now expects full-year revenue of $11.95 billion to $12.05 billion, up from its previous range of $11.78 billion to $11.90 billion. Adjusted earnings guidance is $11.05 to $11.25 a share, a $0.42 increase at both ends, and expected cash from operations is approximately $1.80 billion.
The company repurchased 0.5 million shares for $100 million during the quarter, leaving $1.3 billion under its authorization. It also secured New York State approval for its Haystack measurable residual disease test and began an OncoEMR integration pilot with Flatiron Health and American Oncology Network, extending the test's clinical rollout.