Quest Diagnostics Beats Up on Analysts Yet Again

Quest Diagnostics (NYS: DGX) reported earnings on Jan. 24. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Dec. 31 (Q4), Quest Diagnostics met expectations on revenues and beat expectations on earnings per share.

Compared to the prior-year quarter, revenue improved slightly and earnings per share grew significantly.

Gross margins expanded, operating margins were steady, and net margins increased.

Revenue details
Quest Diagnostics tallied revenue of $1.9 billion. The 22 analysts polled by S&P Capital IQ wanted to see revenue of $1.9 billion. Sales were 3.0% higher than the prior-year quarter's $1.8 billion.


Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions.

EPS details
Non-GAAP EPS came in at $1.23. The 25 earnings estimates compiled by S&P Capital IQ predicted $1.06 per share on the same basis. GAAP EPS of $1.19 for Q4 were 23% higher than the prior-year quarter's $0.96 per share.


Source: S&P Capital IQ. Quarterly periods. Figures may be non-GAAP to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 42.7%, 180 basis points better than the prior-year quarter. Operating margin was 17.3%, about the same as the prior-year quarter. Net margin was 10.1%, 100 basis points better than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $1.9 billion. On the bottom line, the average EPS estimate is $1.03.

Next year's average estimate for revenue is $7.7 billion. The average EPS estimate is $4.66.

Investor sentiment
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 545 members out of 580 rating the stock outperform, and 35 members rating it underperform. Among 188 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 183 give Quest Diagnostics a green thumbs-up, and five give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Quest Diagnostics is hold, with an average price target of $59.25.

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At the time this article was published Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor ofMotley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Motley Fool newsletter services have recommended buying shares of Quest Diagnostics. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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