Quest Diagnostics Incorporated (NYSE: DGX), the world's leading provider of diagnostic testing, information and services, announced that for the fourth quarter ended December 31, 2009, income from continuing operations increased to $182 million, or $0.97 per diluted share, compared to $170 million, or $0.87 per diluted share, in 2008. The quarter included a $0.04 per share charge associated with the early extinguishment of debt, which was offset by certain non-recurring tax benefits totaling $0.04 per share.
Fourth quarter revenues increased 2.7% to $1.8 billion. Clinical testing revenues grew 2.3% compared to the prior year. Revenue per requisition increased 2.6% and clinical testing volume, measured by the number of requisitions, decreased by 0.3%. Excluding the impact of drugs-of-abuse testing, which is sensitive to hiring trends, testing volume increased by approximately 0.5%.
"We drove solid earnings growth in the fourth quarter, completing a year of strong performance. For the full year, earnings per share increased 20%, revenues grew about 3% and cash flow totaled $1 billion," said Surya N. Mohapatra, Ph.D., Chairman and Chief Executive Officer. "Revenues grew largely as a result of increased demand for innovative gene-based and esoteric tests, including cancer diagnostics. Earnings grew through top-line growth combined with continued improvements in operating efficiencies. As the leader in a vital and growing industry that is playing an increasingly important role in improving health outcomes and reducing overall healthcare costs, we are well-positioned for continued growth in 2010."
For the fourth quarter, operating income increased to $330 million, or 17.9% of revenues, from $317 million, or 17.6% of revenues in 2008. Bad debt expense, as a percentage of revenues, improved to 3.9%, compared to 4.3% at the end of 2008. Days sales outstanding improved to 43 days, compared to 44 days a year ago. Cash from operations totaled $360 million, compared to $363 million in the fourth quarter of 2008. During the quarter, the company repurchased $150 million of its common shares and made capital expenditures of $50 million.
Full Year Performance
Diluted earnings per share from continuing operations increased 20% to $3.88. Income from continuing operations increased to $730 million, from $632 million in 2008. Revenues increased 2.8% to $7.5 billion.
Operating income for 2009 increased to $1.4 billion, or 18.2% of revenues, from $1.2 billion, or 16.9% of revenues in 2008. Cash from operations for 2009, which was reduced by a $308 million settlement payment in the second quarter, was $1 billion, compared to $1.1 billion in 2008. During 2009, the company repurchased $500 million of its common shares and made capital expenditures of $167 million.
Outlook for 2010
For 2010, the company expects results from continuing operations as follows: earnings per diluted share of between $4.10 and $4.30, excluding potential special charges; revenue growth of 3% to 4%, and operating income to approach 19% of revenues. Cash from operations is expected to approximate $1.3 billion. Capital expenditures are expected to approximate $200 million.
SOURCE Quest Diagnostics Incorporated