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Weather, job cuts hit Quest Diagnostics' 4Q profit

Wed, 04/20/2011 - 8:45am
The Associated Press

Medical lab operator Quest Diagnostics Inc. said Wednesday that its profit fell 13 percent in the first quarter as severe weather curbed the number of customers going in for medical testing and the company booked a charge related to job cuts.

Quest said it earned $140.8 million, or 86 cents per share, compared with $162.4 million, or 89 cents per share, a year ago. The company said the effect of bad storms on patient traffic ended up trimming profit by 7 cents per share in the latest quarter. Severance and acquisition costs totaled another 7 cents per share.

Excluding one-time costs and gains, the company earned $1 per share. Revenue edged up 1 percent to $1.82 billion from $1.81 billion. Quest said its revenue from clinical testing edged up 0.3 percent as testing volume grew just 2 percent.

Analysts on average expected an adjusted profit of 99 cents per share and $1.81 billion in revenue, according to FactSet.

Quest acquired Athena Diagnostics, a former division of Thermo Fisher Scientific Inc., earlier this month in a deal that cost $740 million. Quest is also in the process of buying diagnostics company Celera Corp. That deal is expected to close by the end of April.

Quest maintained its 2011 outlook for adjusted profit of $4.25 to $4.45 per share. It now says revenue will rise 2 percent, which would imply about $7.52 billion, instead of 1 percent. The company said the additional growth will come from Athena Diagnostics.

Analysts expect a profit of $4.43 per share and $7.51 billion in revenue on average.

Shares fell 14 cents to $58.66 in midday trading.

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