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Tax benefit boosts Quest Diagnostics 3Q profit

Wed, 10/20/2010 - 7:45am
The Associated Press

Medical laboratory operator Quest Diagnostics Inc. said Wednesday its profit grew 3 percent in the third quarter, as a tax benefit canceled out continued declines in revenue and clinical testing.

Quest said net income for the quarter ended Sept. 30 rose to $198 million, or $1.13 per share, from $192.2 million, or $1.02 per share, a year ago. It reported a gain of 8 cents per share primarily from a tax benefit. The company said revenue fell 2 percent, to $1.86 billion from $1.9 billion.

Analysts expected a profit of $1 per share and $1.87 billion in revenue, according to Thomson Reuters.

The company said testing volume slipped 0.3 percent, while clinical testing revenue fell 1.7 percent and revenue per test was down 1.3 percent. Unemployment remains high and demand for testing is down because some people are choosing to save money by staying away from doctors' offices when they are sick.

Quest adjusted its profit forecast, saying it now expects to earn $3.95 to $4 per share in 2010. Previously it expected $3.90 to $4 per share. But the company now thinks its revenue will fall about 1.5 percent for the year instead of 1 percent, which implies a total of $7.34 billion in revenue instead of $7.38 billion.

Analysts expect Quest to report a profit of $3.99 per share and revenue of $7.38 billion.

In morning trading Wednesday, Quest stock was down $1.31, or 2.6 percent, at $48.77.

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