NEW YORK – Quest Diagnostics reported today that its second quarter revenues were down 6 percent year over year.
For the three months ended June 30, total revenues reached $1.83 billion, down from $1.95 billion a year ago, and matching the consensus Wall Street estimate of $1.83 billion.
Quest Diagnostic Information Services revenues fell by around 6 percent to $1.76 billion from $1.87 billion in Q2 2019. Test volume declined by 18 percent year over year.
On a conference call following release of the financial results, Steve Rusckowski, Quest's chairman, CEO and president, noted that the stronger-than-expected quarter had been driven by expanded SARS-CoV-2 testing and a recovery of baseline testing as doctor office visits, elective surgeries, and other healthcare activities began to resume sooner than previously anticipated.
Rusckowski said that the company saw strong demand for molecular SARS-CoV-2 testing coming from increased use in pre-surgical testing, nursing homes, and workplaces as well as the launch of more retail testing sites. The company performed roughly 8.5 million SARS-CoV-2 molecular tests and more than 2.5 serology tests during the quarter.
Rusckowski said Quest could currently run 130,000 molecular SARS-CoV-2 tests per day and expects to expand that to around 150,000 tests per day over the next several weeks. He said, however, that this increase in testing had not kept up with rising demand and that average turnaround time for SARS-CoV-2 testing of high-priority patients was around two days and at least seven days for non-priority patients.
He said the company was exploring a range of options to further boost testing capacity and highlighted the Emergency Use Authorization the company received last week from the US Food and Drug Administration for pooled SARS-CoV-2 testing.
Quest CFO Mark Guinan said on the call that the company began to see improvement in baseline testing volumes in May as they were down that month by around 30 percent compared to more than 50 percent in April. That recovery continued in June, as volumes were down less than 15 percent. He noted, however, that the company has "seen a slight softening" of its base business in early July following spikes in COVID-19 cases around the country.
Looking forward, Guinan said Quest expects base testing volumes to remain below 2019 levels for the remainder or the year but without the steep declines seen in April and May. The low end of the company's guidance assumes a 20 percent decline in base volumes for the rest of 2020.
For Q2 2020, income from continuing operations attributable to Quest was $185 million, or $1.36 per share, down from $206 million, or $1.51 per share, in Q2 2019. On an adjusted basis, EPS from continuing operations was $1.42, beating analysts' average estimate of $1.41.
The company reinstated its full-year 2020 guidance, having withdrawn it in April due to uncertainty around the SARS-CoV-2 pandemic. For full-year 2020, Quest provided revenue guidance of a range between $8 billion and $8.6 billion. Its EPS is expected to be between than $5.66 and $7.66. Adjusted EPS is anticipated to be between $6.60 and $8.60.
Quest exited the quarter with $988 million in cash and cash equivalents.
In Thursday morning trading on the New York Stock Exchange, Quest shares were down less than one percent to $129.55.