Advertisement

Quest Diagnostics Inc. said Wednesday that its third-quarter net income sank 13 percent, and Chairman and CEO Surya N. Mohapatra will leave the medical laboratory operator.

The Madison, N.J., company also announced that its board has increased the company's quarterly dividend to 17 cents per share from 10 cents. The new amount will be payable Jan. 24 to shareholders of record on Jan. 9.

Mohapatra said in a statement from the company that he and the Quest board have agreed that "this is the right time to transition to new leadership," noting the science, information technology and access and distribution assets the company now has in place.

Quest said it has started a search for Mohapatra's successor. The chairman and CEO will stay for up to six months to help with the transition. Mohapatra joined the company as chief operating officer in 1999 and was named CEO and chairman in 2004.

In July, Quest reported a 16 percent drop in second-quarter profit and announced plans to trim costs and lay off 500 workers. It said it planned to eliminate $500 million in annual costs over the next three years.

On Tuesday, Quest said charges tied mainly to restructuring and integration activities reduced third-quarter income from continuing operations by 10 cents per share.

The company earned $171.8 million, or $1.07 per share, in the three months that ended Sept. 30. That compares with earnings of $198 million, or $1.13 per share, in the same quarter last year.

Revenue climbed 2.2 percent to $1.91 billion, helped by the acquisitions of Celera Corp. and Athena Diagnostics.

Analysts surveyed by FactSet expected, on average, earnings of $1.11 per share on $1.89 billion in revenue.

Quest also raised the lower end of its earnings forecast for 2011. It now expects adjusted earnings of between $4.30 and $4.35 per share. That compares with its forecast in July for 2011 earnings of $4.25 to $4.35 per share. Analysts had expected, on average, earnings of $4.22 per share.

Advertisement
Advertisement