Shares of Quest Diagnostics (NYSE: DGX) were 9.9% higher as of 3:36 p.m. EDT on Tuesday. The diagnostic information services company announced better-than-expected first-quarter results before the market opened.
Quest reported Q1 revenue of $1.89 billion, higher than the consensus analysts' estimate of $1.87 billion. The company's Q1 adjusted EPS came in at $1.40, above the consensus estimate of $1.36.
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In the big scheme of things, one good quarter doesn't necessarily mean a whole lot. But it's definitely a positive sign for Quest Diagnostics' underlying business that the company got off to a good start in 2019.
CFO Mark Guinan didn't sound overly confident about the company's Q1 prospects in the fourth-quarter conference call in February. He noted that Quest would incur extra costs in Q1 related to its expanded network access and would have one less revenue day in the quarter. Because of these and other factors, Guinan thought that Q1 revenue would be flat to down, with adjusted EPS similar to its Q4 result.
That turned out to be too pessimistic. CEO Steve Rusckowski stated in the Q1 press release that the company anticipated higher volumes in Q1. That expectation was met and then some. And while Quest continues to face reimbursement pressures, the company's efforts to increase productivity appear to be working.
Quest confirmed its previous full-year 2019 outlook. The company still expects net revenue between $7.6 billion and $7.75 billion with adjusted EPS greater than $6.40. The big thing for investors to watch now is its inclusion into UnitedHealth Group's Preferred Lab Network effective July 1, 2019.
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