NEW YORK – Quest Diagnostics reported on Tuesday 43 percent year-over-year revenue growth for the third quarter.
Revenues were $2.79 billion for the three-month period ended Sept. 30, 2020, up from $1.96 billion in the third quarter last year. The consensus Wall Street estimate was $2.73 billion.
Revenue growth was driven by a recovery in the company's routine testing business and strong demand for SARS-CoV-2 testing, Steve Rusckowski, Quest's president, chairman, and CEO, said on a conference call following release of the earnings results.
Rusckowski said the demand for SARS-CoV-2 testing was driven by continued diagnostic testing of symptomatic individuals as the virus continued to spread, as well as screening of patients undergoing hospital procedures, testing in high-risk environments including nursing homes and prisons, and workplace and school testing.
He noted that the company has also worked during the quarter to expand access to its SARS-CoV-2 testing, receiving US Food and Drug Administration Emergency Use Authorization for a test using unobserved self-collected samples.
Rusckowski said that due to the improvement in its business, Quest will be returning $138 million it received under the Coronavirus Aid, Relief, and Economic Security (CARES) Act.
Quest CFO Mark Guinan said on the call that in Q3 base testing volumes were down roughly 5 percent year over year. Overall volumes were boosted by SARS-CoV-2 testing, he noted, as Quest performed 9.9 million molecular tests and 1.5 million serology tests during Q3.
Requisition volumes were up 20 percent in the quarter, with organic requisition volume up 17 percent and revenue per requisition up 21 percent.
Rusckowski also provided an update on the company's move to standardize its lab equipment to a single vendor, Siemens Healthineers, noting that it has completed that process at 14 of its 18 regional laboratories and that this has allowed for a 50 percent reduction in the labs' equipment footprint.
For Q3, net income attributable to Quest was $568 million, or $4.14 per share, up from $215 million, or $1.56 per share, for the same quarter in 2019.
Adjusted EPS was $4.31 per share for the quarter and beat the consensus analyst estimate of $3.73.
During the quarter, Quest spent $396 million on SG&A, up 9 percent from $362 million in the same quarter last year. The company ended Q3 2020 with $1.61 billion in cash and cash equivalents.
For full-year 2020, the Secaucus, New Jersey-based company revised its revenue guidance to a new range of between $8.8 billion and $9.1 billion from a previous range of $8.4 billion to $8.8 billion.
EPS is now expected to be between $8.22 and $9.22 from a previous range of $7.42 to $8.92, and adjusted EPS is expected to be between $9 and $10, compared to an earlier range of $7.50 to $9.
In Thursday morning trading on the New York Stock Exchange, Quest shares were up 2 percent to $125.05.