Quest Diagnostics Incorporated (NYSE: DGX), the world's leading provider of diagnostic information services, announced today that for the first quarter ended March 31, 2015, adjusted net income was $141 million, compared to $122 million in 2014. Adjusted diluted EPS excluding amortization was $1.05 in the quarter, compared to $0.93 in 2014. Amortization expense was $0.09 per diluted share in both years.
Reported net income was $61 million, or $0.42 per diluted share, compared to $104 million, or $0.71 per diluted share, in 2014. Reported net income in the first quarter of 2015 was negatively impacted by charges of $80 million after tax, or $0.54 per diluted share, principally associated with the early retirement of debt in connection with the company's recent debt refinancing. In addition, a portion of the charges were related to restructuring and integration costs and ongoing efforts to drive operational excellence. In the first quarter of 2014, reported net income was reduced by charges of $18 million after tax, or $0.13 per diluted share, comprised primarily of restructuring and integration costs.
Revenues grew 5.3% to $1.84 billion in the first quarter versus the prior year. Consolidated revenues grew 0.7% on an organic basis versus a year ago. Diagnostic Information Services revenues increased 4.9%. Volume, measured by the number of requisitions, increased 5.6% versus the prior year. Revenue per requisition was 0.7% below the prior year. Excluding acquisitions, revenue per requisition for Diagnostic Information Services was essentially unchanged from a year ago.
For the first quarter of 2015, adjusted operating income was $269 million, or 14.6% of revenues, compared to $236 million, or 13.5% of revenues, in 2014. Reported operating income was $228 million, or 12.4% of revenues, compared to $208 million, or 11.9% of revenues, in 2014. Adjusted cash provided by operations during the first quarter of 2015 was $130 million. Reported cash provided by operations of $52 million was negatively impacted by pre-tax cash charges totaling $78 million associated with the early retirement of debt in connection with the company's recent debt refinancing. In the first quarter of 2014, reported cash provided by operations was $84 million.
"We grew revenues by 5%, adjusted EPS by 13% and adjusted operating income by 14% in the first quarter despite the harsh winter in many parts of the country," said Steve Rusckowski, President and CEO. "We continue to refocus on our core diagnostic information services business and deliver disciplined capital deployment. During the quarter we announced a joint venture with Quintiles to enhance the value of our clinical trials testing business. This month we also completed the debt refinancing and made progress in our commitment to return the majority of free cash flow to shareholders. We're pleased with the continued progress we're making against our five-point strategy."
Outlook for Full-Year 2015
For 2015, the company estimates results from continuing operations, before special items, as follows:
- Revenues to increase 2% to 3% compared to 2014;
- Adjusted diluted EPS excluding amortization to be between $4.70 and $4.85;
- Adjusted cash provided by operations to approximate $850 million; and
- Capital expenditures to approximate $300 million.
Quest Diagnostics Incorporated