Quest Reports Higher Quarterly Profit, But Revenue Is Flat

By Ron Shinkman, Editor, Laboratory Industry Report

Quest Diagnostics reported flat revenue growth but robust profits for the second quarter of 2016.

The New Jersey-based Quest reported net income of $195 million for the quarter ending June 30. That compares to net income of $118 million for the second quarter of 2015, an increase of nearly 70 percent.

“We had another good quarter of earnings growth and a solid first half,” said Quest Chief Executive Officer Steve Rusckowski in a statement. “We’ve refocused our business on diagnostic information services, and without clinical trials or diagnostic products businesses, reported revenues decreased 1 percent but we grew equivalent revenues more than 2 percent in the quarter. Our expanding hospital relationships, including the CLP acquisition and Barnabas Health PLS agreement, have been key contributors to growth this year, and our latest PLS agreement with HCA’s HealthONE system will help continue the momentum. We continued to drive operational excellence, which produced Invigorate cost savings and also improvements in medical quality and our customer experience. We remain on track to meet our commitments for the remainder of the year.”

Some of the growth is attributable to the sale of Quest’s Focus Diagnostics division for a net gain of $34 million after taxes during the quarter. And in the second quarter of 2015, the company had taken a $52 million writeoff related to restructuring the company’s debt.

Revenue for the quarter was $1.9 billion, essentially flat from the $1.93 billion in revenue reported during the second quarter of 2015.