Plateau. It’s a geographic item usually associated with the American Southwest, but it can now also be attributed to New Jersey—more specifically, the financial landscape for Madison-based Quest Diagnostics. Quest’s revenue for 2012: $7.38 billion. Its revenue for 2011: $7.39 billion. The nation’s largest laboratory did show significantly better results in terms of net income, which grew 18.2 percent in 2012 versus 2011, from $470.6 million to $555.7 million. That was despite the fact that damage and disruption from Superstorm Sandy was blamed for an estimated revenue hit of $21 million and operating earnings of $21 million during the fourth quarter that ended Dec. 31. Positive cash flow was also up for the year, to $1.2 billion in 2012 compared to $987 million in 2011. However, much of that improved performance is linked to the $241 million settlement Quest paid in May 2011 to settle Medicaid overbilling charges in California—an expense that was off the books in 2012. For the fourth quarter, net income was $55.8 million on revenue of $1.77 billion, down from $189.5 million on revenue of $1.84 billion during the fourth quarter of 2011. Quest officials did not promise much immediate improvement. Officials said the company’s 2013 […]
Plateau. It’s a geographic item usually associated with the American Southwest, but it can now also be attributed to New Jersey—more specifically, the financial landscape for Madison-based Quest Diagnostics.
Quest’s revenue for 2012: $7.38 billion. Its revenue for 2011: $7.39 billion.
The nation’s largest laboratory did show significantly better results in terms of net income, which grew 18.2 percent in 2012 versus 2011, from $470.6 million to $555.7 million. That was despite the fact that damage and disruption from Superstorm Sandy was blamed for an estimated revenue hit of $21 million and operating earnings of $21 million during the fourth quarter that ended Dec. 31. Positive cash flow was also up for the year, to $1.2 billion in 2012 compared to $987 million in 2011.
However, much of that improved performance is linked to the $241 million settlement Quest paid in May 2011 to settle Medicaid overbilling charges in California—an expense that was off the books in 2012.
For the fourth quarter, net income was $55.8 million on revenue of $1.77 billion, down from $189.5 million on revenue of $1.84 billion during the fourth quarter of 2011.
Quest officials did not promise much immediate improvement. Officials said the company’s 2013 guidance projected revenues would remain flat, as would operating income. However, earnings per share are expected to grow from the $3.46 posted in 2012 to between $4.35 and $4.55 per share in 2013. That’s linked primarily to a combination of stock buybacks and expense reductions.
“In 2013 our focus will continue to be driving operational excellence and restoring growth,” said Chief Executive Officer Steve Rusckowski. He added that the restructuring plans he’s undertaken since being appointed CEO in the middle of last year will begin to show results after the second half of the year.
Among Rusckowski’s changes has been a refocusing of the company on two core assets: traditional diagnostics and diagnostic information services. That has included a restructuring that is in the midst of cutting 600 management-level positions. It is expected to save the company as much as $500 million a year moving forward.
