- Third quarter revenues of $2.49
billion, up 8.5% from 2023
- Third quarter reported diluted earnings per share ("EPS") of
$1.99, up 1.5% from 2023; and
adjusted diluted EPS of $2.30, up
3.6% from 2023
- Full year 2024 revenues now expected to be between $9.80 billion and $9.85
billion; reported diluted EPS now expected to be between
$7.60 and $7.70; and adjusted diluted EPS expected to be
between $8.85 and $8.95
SECAUCUS, N.J., Oct. 22, 2024 /PRNewswire/ -- Quest
Diagnostics Incorporated (NYSE: DGX), a leading provider of
diagnostic information services, today announced financial results
for the third quarter ended September 30, 2024.
"We delivered a strong third quarter, with total revenue growth
of 8.5%, including 4.2% organic growth," said Jim Davis, Chairman, CEO and President. "Our
performance was driven by new customer wins and expanded business
with physicians and hospitals as well as recent acquisitions,
including LifeLabs. We are now on track to complete eight
acquisitions by year's end that meet our criteria for
profitability, growth and returns."
"We have increased our 2024 revenue guidance due to
contributions from recent acquisitions and have maintained the
midpoint of our adjusted EPS guidance despite the impact of
Hurricane Milton in the fourth quarter," Mr. Davis continued.
"Given the strength of our business and revenue from acquisitions,
we are well positioned to drive accelerated revenue and earnings
growth in 2025."
|
Three Months Ended September
30,
|
|
Nine Months Ended September 30,
|
|
2024
|
|
2023
|
|
Change
|
|
2024
|
|
2023
|
|
Change
|
|
(dollars in millions,
except per share data)
|
|
Reported:
|
|
|
|
|
|
|
|
|
|
|
|
|
Net revenues
|
$ 2,488
|
|
$ 2,295
|
|
8.5 %
|
|
$ 7,251
|
|
$ 6,964
|
|
4.1 %
|
|
Diagnostic Information
Services revenues
|
$ 2,427
|
|
$ 2,228
|
|
9.0 %
|
|
$ 7,058
|
|
$ 6,755
|
|
4.5 %
|
|
Revenue per
requisition
|
|
|
|
|
3.3 %
|
|
|
|
|
|
1.7 %
|
|
Requisition
volume
|
|
|
|
|
5.5 %
|
|
|
|
|
|
2.7 %
|
|
Organic
requisition volume
|
|
|
|
|
0.5 %
|
|
|
|
|
|
0.7 %
|
|
Operating income
(a)
|
$
330
|
|
$
342
|
|
(3.3) %
|
|
$
985
|
|
$
995
|
|
(1.0) %
|
|
Operating income as a
percentage of net revenues (a)
|
13.3 %
|
|
14.9 %
|
|
(1.6) %
|
|
13.6 %
|
|
14.3 %
|
|
(0.7) %
|
|
Net income attributable
to Quest Diagnostics (a)
|
$
226
|
|
$
225
|
|
0.5 %
|
|
$
649
|
|
$
662
|
|
(1.9) %
|
|
Diluted EPS
(a)
|
$
1.99
|
|
$
1.96
|
|
1.5 %
|
|
$ 5.74
|
|
$ 5.79
|
|
(0.9) %
|
|
Cash provided by
operations
|
$
356
|
|
$
207
|
|
72.5 %
|
|
$
870
|
|
$
745
|
|
17.0 %
|
|
Capital
expenditures
|
$
106
|
|
$
105
|
|
1.0 %
|
|
$
302
|
|
$
336
|
|
(10.4) %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted (a):
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
income
|
$
385
|
|
$
380
|
|
1.3 %
|
|
$ 1,132
|
|
$ 1,119
|
|
1.1 %
|
|
Operating income as a
percentage of net revenues
|
15.5 %
|
|
16.6 %
|
|
(1.1) %
|
|
15.6 %
|
|
16.1 %
|
|
(0.5) %
|
|
Net income attributable
to Quest Diagnostics
|
$
262
|
|
$
254
|
|
3.1 %
|
|
$
758
|
|
$
749
|
|
1.2 %
|
|
Diluted EPS
|
$
2.30
|
|
$
2.22
|
|
3.6 %
|
|
$ 6.70
|
|
$ 6.56
|
|
2.1 %
|
|
|
|
(a)
|
For further details
impacting the year-over-year comparisons related to operating
income, operating income as a percentage of net revenues, net
income attributable to Quest Diagnostics, and diluted EPS, see note
2 of the financial tables attached below.
|
Updated Guidance for Full Year 2024
The company updates its full year 2024 guidance as shown in the
table below. The updated guidance reflects the impact of recent
acquisitions including LifeLabs as well as the impact from
Hurricane Milton in the fourth quarter. The company projects the
disruption from Hurricane Milton to negatively impact net revenues
by approximately $15 million and EPS
by approximately 8 cents in the
fourth quarter.
|
Updated Guidance
|
|
Prior Guidance
|
|
Low
|
|
High
|
|
Low
|
|
High
|
|
Net revenues
|
$9.80
billion
|
|
$9.85
billion
|
|
$9.50
billion
|
|
$9.58
billion
|
|
Net revenues
increase
|
5.9 %
|
|
6.5 %
|
|
2.7 %
|
|
3.5 %
|
|
Reported diluted
EPS
|
$7.60
|
|
$7.70
|
|
$7.57
|
|
$7.77
|
|
Adjusted diluted
EPS
|
$8.85
|
|
$8.95
|
|
$8.80
|
|
$9.00
|
|
Cash provided by
operations
|
Approximately $1.3
billion
|
|
Approximately $1.3
billion
|
|
Capital
expenditures
|
Approximately
$420 million
|
|
Approximately $420
million
|
Note on Non-GAAP Financial Measures
As used in this press release the term "reported" refers to
measures under accounting principles generally accepted in
the United States ("GAAP"). The
term "adjusted" refers to non-GAAP operating performance measures
that exclude special items such as restructuring and integration
charges, amortization expense, excess tax benefits ("ETB")
associated with stock-based compensation, gains and losses
associated with changes in the carrying value of our strategic
investments, and other items.
Non-GAAP adjusted measures are presented because management
believes those measures are useful adjuncts to GAAP results.
Non-GAAP adjusted measures should not be considered as an
alternative to the corresponding measures determined under GAAP.
Management may use these non-GAAP measures to evaluate our
performance period over period and relative to competitors, to
analyze the underlying trends in our business, to establish
operational budgets and forecasts and for incentive compensation
purposes. We believe that these non-GAAP measures are useful to
investors and analysts to evaluate our performance period over
period and relative to competitors, as well as to analyze the
underlying trends in our business and to assess our performance.
The additional tables attached below include reconciliations of
non-GAAP adjusted measures to GAAP measures.
Conference Call Information
Quest Diagnostics will hold its quarterly conference call to
discuss financial results beginning at 8:30
a.m. Eastern Time today. The conference call can be
accessed by dialing 888-455-0391 within the U.S. and Canada, or 773-756-0467 internationally,
passcode: 7895081; or via live webcast on our website at
www.QuestDiagnostics.com/investor. We suggest participants
dial in approximately 10 minutes before the call.
A replay of the call may be accessed online at
www.QuestDiagnostics.com/investor or, from approximately
10:30 a.m. Eastern Time on
October 22, 2024 until midnight Eastern
Time on November 5, 2024, by phone at 800-839-5154 for
domestic callers or 203-369-3358 for international callers.
Anyone listening to the call is encouraged to read our periodic
reports, on file with the Securities and Exchange Commission,
including the discussion of risk factors and historical results of
operations and financial condition in those reports.
About Quest Diagnostics
Quest Diagnostics works across the healthcare ecosystem to
create a healthier world, one life at a time. We provide diagnostic
insights from the results of our laboratory testing to empower
people, physicians and organizations to take action to improve
health outcomes. Derived from one of the world's largest databases
of de-identifiable clinical lab results, Quest's diagnostic
insights reveal new avenues to identify and treat disease, inspire
healthy behaviors and improve healthcare management. Quest
Diagnostics annually serves one in three adult Americans and half
the physicians and hospitals in the
United States, and our more than 50,000 employees understand
that, in the right hands and with the right context, our diagnostic
insights can inspire actions that transform lives and create a
healthier world. www.QuestDiagnostics.com.
Forward Looking Statements
The statements in this press release which are not historical
facts may be forward-looking statements. Readers are
cautioned not to place undue reliance on forward-looking
statements, which speak only as of the date that they are made and
which reflect management's current estimates, projections,
expectations or beliefs and which involve risks and uncertainties
that could cause actual results and outcomes to be materially
different. Risks and uncertainties that may affect the future
results of the company include, but are not limited to, adverse
results from pending or future government investigations, lawsuits
or private actions, the competitive environment, the complexity of
billing, reimbursement and revenue recognition for clinical
laboratory testing, changes in government regulations, changing
relationships with customers, payers, suppliers or strategic
partners, acquisitions and other factors discussed in the company's
most recently filed Annual Report on Form 10-K and in any of the
company's subsequently filed Quarterly Reports on Form 10-Q and
Current Reports on Form 8-K, including those discussed in the
"Business," "Risk Factors," "Cautionary Factors that May Affect
Future Results" and "Management's Discussion and Analysis of
Financial Condition and Results of Operations" sections of those
reports.
This earnings release, including the attached financial tables,
is available online in the Newsroom section at
www.QuestDiagnostics.com.
ADDITIONAL TABLES FOLLOW
|
Quest Diagnostics
Incorporated and Subsidiaries
Consolidated
Statements of Operations
For the Three
and Nine Months Ended September 30, 2024 and
2023
(in millions,
except per share data)
(unaudited)
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
2024
|
|
2023
|
|
2024
|
|
2023
|
|
Net revenues
|
$
2,488
|
|
$
2,295
|
|
$
7,251
|
|
$
6,964
|
|
|
|
|
|
|
|
|
|
Operating costs and expenses and other operating
income:
|
|
|
|
|
|
|
|
|
Cost of
services
|
1,677
|
|
1,541
|
|
4,865
|
|
4,647
|
|
Selling, general and
administrative
|
448
|
|
380
|
|
1,304
|
|
1,235
|
|
Amortization of
intangible assets
|
32
|
|
27
|
|
90
|
|
81
|
|
Other operating
expense, net
|
1
|
|
5
|
|
7
|
|
6
|
|
Total operating costs
and expenses, net
|
2,158
|
|
1,953
|
|
6,266
|
|
5,969
|
|
|
|
|
|
|
|
|
|
Operating income
|
330
|
|
342
|
|
985
|
|
995
|
|
|
|
|
|
|
|
|
|
Other income (expense):
|
|
|
|
|
|
|
|
|
Interest expense,
net
|
(49)
|
|
(40)
|
|
(136)
|
|
(112)
|
|
Other income (expense),
net
|
15
|
|
(3)
|
|
27
|
|
10
|
|
Total non-operating
expense, net
|
(34)
|
|
(43)
|
|
(109)
|
|
(102)
|
|
|
|
|
|
|
|
|
|
Income before income taxes and equity in earnings of
equity method investees
|
296
|
|
299
|
|
876
|
|
893
|
|
Income tax expense
|
(65)
|
|
(68)
|
|
(205)
|
|
(208)
|
|
Equity in earnings of equity method investees, net of
taxes
|
6
|
|
6
|
|
14
|
|
18
|
|
Net income
|
237
|
|
237
|
|
685
|
|
703
|
|
Less: Net income attributable to noncontrolling
interests
|
11
|
|
12
|
|
36
|
|
41
|
|
Net income attributable to Quest
Diagnostics
|
$ 226
|
|
$ 225
|
|
$ 649
|
|
$ 662
|
|
|
|
|
|
|
|
|
|
Earnings per share attributable to Quest Diagnostics'
common stockholders:
|
|
|
|
|
|
|
|
|
Basic
|
$ 2.01
|
|
$ 1.99
|
|
$
5.80
|
|
$ 5.87
|
|
|
|
|
|
|
|
|
|
Diluted
|
$ 1.99
|
|
$ 1.96
|
|
$
5.74
|
|
$ 5.79
|
|
|
|
|
|
|
|
|
|
Weighted average common shares
outstanding:
|
|
|
|
|
|
|
|
|
Basic
|
112
|
|
112
|
|
111
|
|
112
|
|
|
|
|
|
|
|
|
|
Diluted
|
113
|
|
114
|
|
112
|
|
114
|
|
Quest Diagnostics
Incorporated and Subsidiaries
Consolidated
Balance Sheets
September 30,
2024 and December 31, 2023
(in millions,
except per share data)
(unaudited)
|
|
|
September 30,
2024
|
|
December 31,
2023
|
|
Assets
|
|
|
|
|
Current assets:
|
|
|
|
|
Cash and cash
equivalents
|
$
764
|
|
$
686
|
|
Accounts receivable,
net
|
1,376
|
|
1,210
|
|
Inventories
|
184
|
|
190
|
|
Prepaid expenses and
other current assets
|
299
|
|
286
|
|
Total current
assets
|
2,623
|
|
2,372
|
|
Property, plant and equipment,
net
|
2,093
|
|
1,816
|
|
Operating lease right-of-use
assets
|
661
|
|
602
|
|
Goodwill
|
8,605
|
|
7,733
|
|
Intangible assets, net
|
1,716
|
|
1,166
|
|
Investments in equity method
investees
|
125
|
|
135
|
|
Other assets
|
272
|
|
198
|
|
Total assets
|
$
16,095
|
|
$
14,022
|
|
|
|
|
|
Liabilities and Stockholders'
Equity
|
|
|
|
|
Current liabilities:
|
|
|
|
|
Accounts payable and
accrued expenses
|
$
1,313
|
|
$
1,359
|
|
Current portion of
long-term debt
|
603
|
|
303
|
|
Current portion of
long-term operating lease liabilities
|
176
|
|
153
|
|
Total current
liabilities
|
2,092
|
|
1,815
|
|
Long-term debt
|
5,648
|
|
4,410
|
|
Long-term operating lease
liabilities
|
543
|
|
503
|
|
Other liabilities
|
891
|
|
876
|
|
Redeemable noncontrolling
interest
|
80
|
|
76
|
|
Stockholders' equity:
|
|
|
|
|
Quest Diagnostics
stockholders' equity:
|
|
|
|
|
Common stock, par
value $0.01 per share; 600 shares authorized as of both
September 30, 2024
and December 31, 2023; 162 shares issued as of both
September 30, 2024 and December 31, 2023
|
2
|
|
2
|
|
Additional paid-in
capital
|
2,332
|
|
2,320
|
|
Retained
earnings
|
9,222
|
|
8,825
|
|
Accumulated other
comprehensive loss
|
(15)
|
|
(14)
|
|
Treasury stock, at
cost; 50 shares and 51 shares as of September 30, 2024 and
December 31,
2023, respectively
|
(4,732)
|
|
(4,826)
|
|
Total Quest
Diagnostics stockholders' equity
|
6,809
|
|
6,307
|
|
Noncontrolling
interests
|
32
|
|
35
|
|
Total stockholders'
equity
|
6,841
|
|
6,342
|
|
Total liabilities and stockholders'
equity
|
$
16,095
|
|
$
14,022
|
|
Quest Diagnostics
Incorporated and Subsidiaries
Consolidated
Statements of Cash Flows
For the Nine
Months Ended September 30, 2024 and 2023
(in
millions)
(unaudited)
|
|
|
Nine Months Ended September 30,
|
|
2024
|
|
2023
|
|
Cash flows from operating
activities:
|
|
|
|
|
Net income
|
$
685
|
|
$
703
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
Depreciation and
amortization
|
358
|
|
330
|
|
Provision for credit
losses
|
4
|
|
—
|
|
Deferred income tax
benefit
|
(21)
|
|
(39)
|
|
Stock-based
compensation expense
|
61
|
|
58
|
|
Other, net
|
17
|
|
12
|
|
Changes in operating
assets and liabilities:
|
|
|
|
|
Accounts
receivable
|
(140)
|
|
(86)
|
|
Accounts payable and
accrued expenses
|
(102)
|
|
(231)
|
|
Income taxes
payable
|
31
|
|
—
|
|
Other assets and
liabilities, net
|
(23)
|
|
(2)
|
|
Net cash provided by operating
activities
|
870
|
|
745
|
|
|
|
|
|
Cash flows from investing
activities:
|
|
|
|
|
Business acquisitions,
net of cash acquired
|
(1,781)
|
|
(611)
|
|
Capital
expenditures
|
(302)
|
|
(336)
|
|
Other investing
activities, net
|
37
|
|
—
|
|
Net cash used in investing
activities
|
(2,046)
|
|
(947)
|
|
|
|
|
|
Cash flows from financing
activities:
|
|
|
|
|
Proceeds from
borrowings
|
1,846
|
|
1,703
|
|
Repayments of
debt
|
(302)
|
|
(1,426)
|
|
Exercise of stock
options
|
52
|
|
60
|
|
Employee payroll tax
withholdings on stock issued under stock-based compensation
plans
|
(24)
|
|
(28)
|
|
Dividends
paid
|
(247)
|
|
(234)
|
|
Distributions to
noncontrolling interest partners
|
(35)
|
|
(41)
|
|
Other financing
activities, net
|
(36)
|
|
(4)
|
|
Net cash provided by financing
activities
|
1,254
|
|
30
|
|
|
|
|
|
Net change in cash and cash equivalents and
restricted cash
|
78
|
|
(172)
|
|
Cash and cash equivalents and restricted cash,
beginning of period
|
686
|
|
315
|
|
Cash and cash equivalents and restricted cash, end of
period
|
$
764
|
|
$
143
|
|
|
|
|
|
Cash paid during the period
for:
|
|
|
|
|
Interest
|
$
167
|
|
$
97
|
|
Income taxes
|
$
179
|
|
$
233
|
Notes to Financial Tables
|
1)
|
The computation of
basic and diluted earnings per common share is as
follows:
|
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
2024
|
|
2023
|
|
2024
|
|
2023
|
|
(in millions, except
per share data)
|
|
Amounts attributable to Quest Diagnostics' common
stockholders:
|
|
|
|
|
|
|
|
|
Net income attributable
to Quest Diagnostics
|
$
226
|
|
$
225
|
|
$
649
|
|
$
662
|
|
Less: earnings
allocated to participating securities
|
1
|
|
2
|
|
3
|
|
4
|
|
Earnings available to
Quest Diagnostics' common stockholders - basic and
diluted
|
$
225
|
|
$
223
|
|
$
646
|
|
$
658
|
|
|
|
|
|
|
|
|
|
Weighted average common
shares outstanding - basic
|
112
|
|
112
|
|
111
|
|
112
|
|
Effect of dilutive
securities:
|
|
|
|
|
|
|
|
|
Stock options and
performance share units
|
1
|
|
2
|
|
1
|
|
2
|
|
Weighted average common
shares outstanding - diluted
|
113
|
|
114
|
|
112
|
|
114
|
|
|
|
|
|
|
|
|
|
Earnings per share attributable to Quest Diagnostics'
common stockholders:
|
|
|
|
|
|
|
|
|
Basic
|
$
2.01
|
|
$
1.99
|
|
$
5.80
|
|
$
5.87
|
|
Diluted
|
$
1.99
|
|
$
1.96
|
|
$
5.74
|
|
$
5.79
|
|
2)
|
The following tables
reconcile reported GAAP results to non-GAAP adjusted
results:
|
|
|
|
Three Months Ended September 30,
2024
|
|
(dollars in millions, except per share
data)
|
|
Operating
income
|
|
Operating
income as a
percentage of
net revenues
|
|
Income tax
expense (e)
|
|
Equity in
earnings of
equity method
investees, net of
taxes
|
|
Net income
attributable to
Quest
Diagnostics
|
|
Diluted EPS
|
|
As
reported
|
$
330
|
|
13.3 %
|
|
$
(65)
|
|
$
6
|
|
$
226
|
|
$
1.99
|
|
Restructuring and
integration charges (a)
|
18
|
|
0.7
|
|
(3)
|
|
—
|
|
15
|
|
0.13
|
|
Other charges
(b)
|
5
|
|
0.2
|
|
—
|
|
—
|
|
4
|
|
0.04
|
|
Gains and losses on
investments (c)
|
—
|
|
—
|
|
—
|
|
2
|
|
2
|
|
0.02
|
|
Other gains
(d)
|
—
|
|
—
|
|
2
|
|
—
|
|
(6)
|
|
(0.06)
|
|
Amortization
expense
|
32
|
|
1.3
|
|
(8)
|
|
—
|
|
24
|
|
0.21
|
|
ETB
|
—
|
|
—
|
|
(3)
|
|
—
|
|
(3)
|
|
(0.03)
|
|
As
adjusted
|
$
385
|
|
15.5 %
|
|
$
(77)
|
|
$
8
|
|
$
262
|
|
$
2.30
|
|
Nine Months Ended September 30,
2024
|
|
(dollars in millions, except per share
data)
|
|
Operating
income
|
|
Operating
income as a
percentage of
net revenues
|
|
Income tax
expense (e)
|
|
Equity in
earnings of
equity method
investees, net of
taxes
|
|
Net income
attributable to
Quest
Diagnostics
|
|
Diluted EPS
|
|
As
reported
|
$
985
|
|
13.6 %
|
|
$
(205)
|
|
$
14
|
|
$
649
|
|
$
5.74
|
|
Restructuring and
integration charges (a)
|
45
|
|
0.6
|
|
(10)
|
|
—
|
|
35
|
|
0.31
|
|
Other charges
(b)
|
12
|
|
0.2
|
|
—
|
|
—
|
|
11
|
|
0.10
|
|
Gains and losses on
investments (c)
|
—
|
|
—
|
|
(3)
|
|
11
|
|
8
|
|
0.07
|
|
Other gains
(d)
|
—
|
|
—
|
|
2
|
|
—
|
|
(6)
|
|
(0.06)
|
|
Amortization
expense
|
90
|
|
1.2
|
|
(23)
|
|
—
|
|
67
|
|
0.59
|
|
ETB
|
—
|
|
—
|
|
(6)
|
|
—
|
|
(6)
|
|
(0.05)
|
|
As
adjusted
|
$
1,132
|
|
15.6 %
|
|
$
(245)
|
|
$
25
|
|
$
758
|
|
$
6.70
|
|
Three Months Ended September 30,
2023
|
|
(dollars in millions, except per share
data)
|
|
Operating
income
|
|
Operating
income as a
percentage of
net revenues
|
|
Income tax
expense (e)
|
|
Equity in
earnings of
equity method
investees, net
of taxes
|
|
Net income
attributable to
Quest
Diagnostics
|
|
Diluted EPS
|
|
As
reported
|
$
342
|
|
14.9 %
|
|
$
(68)
|
|
$
6
|
|
$
225
|
|
$
1.96
|
|
Restructuring and
integration charges (a)
|
6
|
|
0.3
|
|
(1)
|
|
—
|
|
5
|
|
0.05
|
|
Other charges
(b)
|
5
|
|
0.2
|
|
—
|
|
—
|
|
5
|
|
0.04
|
|
Amortization
expense
|
27
|
|
1.2
|
|
(6)
|
|
—
|
|
21
|
|
0.18
|
|
ETB
|
—
|
|
—
|
|
(2)
|
|
—
|
|
(2)
|
|
(0.01)
|
|
As
adjusted
|
$
380
|
|
16.6 %
|
|
$
(77)
|
|
$
6
|
|
$
254
|
|
$
2.22
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended September 30,
2023
|
|
(dollars in millions, except per share
data)
|
|
Operating
income
|
|
Operating
income as a
percentage of
net revenues
|
|
Income tax
expense (e)
|
|
Equity in
earnings of
equity method
investees, net
of taxes
|
|
Net income
attributable to
Quest
Diagnostics
|
|
Diluted EPS
|
|
As
reported
|
$
995
|
|
14.3 %
|
|
$
(208)
|
|
$
18
|
|
$
662
|
|
$
5.79
|
|
Restructuring and
integration charges (a)
|
32
|
|
0.5
|
|
(8)
|
|
—
|
|
24
|
|
0.22
|
|
Other charges
(b)
|
11
|
|
0.1
|
|
(2)
|
|
—
|
|
9
|
|
0.08
|
|
Gains and losses on
investments (c)
|
—
|
|
—
|
|
(1)
|
|
3
|
|
2
|
|
0.02
|
|
Amortization
expense
|
81
|
|
1.2
|
|
(20)
|
|
—
|
|
61
|
|
0.53
|
|
ETB
|
—
|
|
—
|
|
(9)
|
|
—
|
|
(9)
|
|
(0.08)
|
|
As
adjusted
|
$
1,119
|
|
16.1 %
|
|
$
(248)
|
|
$
21
|
|
$
749
|
|
$
6.56
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
For both the three and
nine months ended September 30, 2024 and 2023, the pre-tax impact
represents costs primarily associated with workforce reductions and
integration costs incurred in connection with further restructuring
and integrating our business. The following table summarizes
the pre-tax impact of restructuring and integration charges on our
consolidated statements of operations:
|
|
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
2024
|
|
2023
|
|
2024
|
|
2023
|
|
(dollars in
millions)
|
|
Cost of
services
|
$
5
|
|
$
2
|
|
$
19
|
|
$
12
|
|
Selling, general and
administrative
|
15
|
|
4
|
|
28
|
|
20
|
|
Other operating
expense, net
|
(2)
|
|
—
|
|
(2)
|
|
—
|
|
Operating
income
|
$
18
|
|
$
6
|
|
$
45
|
|
$
32
|
|
(b)
|
For the periods
presented other operating expense, net includes pre-tax losses
associated with the increase in the fair value of the contingent
consideration accrual associated with previous acquisitions.
Additionally, for the nine months ended September 30, 2023,
selling, general and administrative expenses includes the
impairment of a corporate facility that was sold. The
following table summarizes the pre-tax impact of these other items
on our consolidated statements of operations:
|
|
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
2024
|
|
2023
|
|
2024
|
|
2023
|
|
(dollars in
millions)
|
|
Selling, general and
administrative
|
$
1
|
|
$
1
|
|
$
2
|
|
$
7
|
|
Other operating
expense, net
|
4
|
|
4
|
|
10
|
|
4
|
|
Operating
income
|
$
5
|
|
$
5
|
|
$
12
|
|
$
11
|
|
|
|
|
(c)
|
For both the three and
nine months ended September 30, 2024 and for the nine months ended
September 30, 2023, the pre-tax impact represents gains and losses
associated with changes in the carrying value of our strategic
investments, recorded in equity in earnings of equity method
investees, net of taxes.
|
|
|
|
|
(d)
|
For the three and nine
months ended September 30, 2024, other income (expense), net
includes a non-recurring $8 million pre-tax gain associated with a
foreign exchange forward contract utilized in conjunction with an
acquisition.
|
|
|
|
|
(e)
|
For restructuring and
integration charges, gains and losses on investments, other charges
and gains, and amortization expense, income tax impacts, where
recorded, were primarily calculated using combined statutory income
tax rates of 25.5% for both 2024 and 2023.
|
|
3)
|
The outlook for
adjusted diluted EPS represents management's estimates for the full
year 2024 before the impact of special items. Further impacts to
earnings related to special items may occur throughout 2024.
Additionally, the amount of ETB is dependent upon employee stock
option exercises and our stock price, which are difficult to
predict. The following table reconciles our 2024 outlook for
diluted EPS under GAAP to our outlook for adjusted diluted
EPS:
|
|
|
|
Low
|
|
High
|
|
Diluted EPS
|
$
7.60
|
|
$
7.70
|
|
Restructuring and
integration charges (a)
|
0.34
|
|
0.34
|
|
Amortization expense
(b)
|
0.85
|
|
0.85
|
|
Other charges
(c)
|
0.12
|
|
0.12
|
|
Gains and losses on
investments (d)
|
0.07
|
|
0.07
|
|
Other gains
(e)
|
(0.06)
|
|
(0.06)
|
|
ETB
|
(0.07)
|
|
(0.07)
|
|
Adjusted diluted
EPS
|
$
8.85
|
|
$
8.95
|
|
|
|
|
(a)
|
Represents estimated
pre-tax charges of $50 million primarily associated with workforce
reductions and integration costs incurred in connection with
further restructuring and integrating our business. Income
tax benefits were primarily calculated using a combined statutory
income tax rate of 25.5%.
|
|
|
|
|
(b)
|
Represents estimated
pre-tax amortization expenses of $129 million. Income tax
benefits were primarily calculated using a combined statutory
income tax rate of 25.5%.
|
|
|
|
|
(c)
|
Principally represents
estimated pre-tax net losses of $13 million associated with the
increase in the fair value of the contingent consideration accrual
associated with previous acquisitions. No income tax benefits
are recorded on the losses associated with the contingent
consideration accrual.
|
|
|
|
|
(d)
|
Represents $11 million
of pre-tax losses associated with changes in the carrying value of
our strategic investments. Income tax impacts were calculated using
a combined statutory income tax rate of 25.5%.
|
|
|
|
|
(e)
|
Includes a
non-recurring $8 million pre-tax gain associated with a foreign
exchange forward contract utilized in conjunction with an
acquisition. Income tax impacts on the gain were calculated
using a combined statutory income tax rate of 25.5%.
|
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SOURCE Quest Diagnostics
