) is scheduled to release its fourth-quarter and full-year 2012
results on Wednesday, Jan 23, 2013, before the market opens.
Let's see how things are shaping up before the announcement.
Growth Factors this Past Quarter
We remain concerned about Quest Diagnostics as it is
continuously witnessing challenges with testing volume. Moreover,
reimbursement pressure from the government and other payers
continue. However, following the divestment of its OralDNA Labs
salivary-diagnostics business to Access Genetics in Dec 2012,
Quest Diagnostics came up with the plan to sell its HemoCue
diagnostic products business. The company believes that these
divestitures will allow it to refocus its resources toward core
diagnostic information services, drive operational excellence and
The company expects these divestments to reduce its 2012
revenues by $117 million, operating income by $11 million and net
income from continuing operations by $15 million. Consequently,
earnings per share (EPS) are expected to decrease by 9 cents in
2012. The company expects to incur an asset impairment charge of
$89.5 million related to the divestment of HemoCue and OralDNA.
Meanwhile, Quest Diagnostics disclosed the impact of Hurricane
Sandy on its business. According to the company, this catastrophe
was a big blow to its fourth-quarter 2012 performance, reducing
revenues by an estimated $21 million, operating income by $16
million and EPS by 6 cents.
Our proven model does not conclusively show that Quest
Diagnostics is likely to beat earnings this quarter. This is
because a stock needs to have both a positive Zacks Earnings ESP
Zacks Earnings ESP: A Better Method
) and a Zacks Rank of #1, 2 or 3 for this to happen. This is not
the case here as you will see below.
Negative Zacks ESP:
This is because the Most Accurate estimate stands at $1.03, while
the Zacks Consensus Estimate is higher at $1.07. This comes to a
difference of -3.74%.
Zacks #4 Rank (Sell).
Quest Diagnostics'Zacks Rank #4 (Sell) lowers the predictive
power of ESP because the Zacks Rank #4 together with a negative
ESP makes surprise prediction difficult. Moreover, the stock has
been witnessing a downward estimate revision over the past 30 and
Other Stocks to Consider
Here are some other companies you may want to consider as our
model shows that they have the right ingredients to post an
earnings beat this quarter:
), Earnings ESP of +72.73% and Zacks Rank #1 (Strong Buy)
Becton, Dickinson and Company
), Earnings ESP of +3.25% and Zacks Rank #2 (Buy)
Hill-Rom Holdings Inc.
), Earnings ESP of +2.27% and Zacks Rank #2 (Buy)
About Earnings ESP
Would you like to own more stocks likely to beat their next
earnings report? And avoid stocks likely to disappoint?
If yes, then it's time you learn about the Earnings ESP score
available on Zacks.com.
BECTON DICKINSO (BDX): Free Stock Analysis
QUEST DIAGNOSTC (DGX): Free Stock Analysis
HILL-ROM HLDGS (HRC): Free Stock Analysis
NUVASIVE INC (NUVA): Free Stock Analysis
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