Quest Diagnostics Reports Third Quarter 2024 Financial Results; Updates Guidance for Full Year 2024
Quest Diagnostics (NYSE: DGX) reported strong third quarter 2024 financial results, with revenues of $2.49 billion, up 8.5% from 2023. The company's performance was driven by new customer wins, expanded business, and recent acquisitions. Reported diluted EPS increased 1.5% to $1.99, while adjusted diluted EPS rose 3.6% to $2.30.
Quest has updated its full-year 2024 guidance, now expecting revenues between $9.80 billion and $9.85 billion. Reported diluted EPS is projected to be between $7.60 and $7.70, with adjusted diluted EPS between $8.85 and $8.95. The guidance reflects recent acquisitions and the impact of Hurricane Milton in Q4, which is expected to negatively affect net revenues by approximately $15 million and EPS by about 8 cents.
Quest Diagnostics (NYSE: DGX) ha riportato risultati finanziari solidi per il terzo trimestre del 2024, con ricavi di 2,49 miliardi di dollari, in aumento dell'8,5% rispetto al 2023. Le performance dell'azienda sono state trainate da nuovi contratti, espansione del business e recenti acquisizioni. L'EPS diluito riportato è aumentato del 1,5% a 1,99 dollari, mentre l'EPS diluito rettificato è salito del 3,6% a 2,30 dollari.
Quest ha aggiornato la sua previsione per l'intero anno 2024, prevedendo ora ricavi compresi tra 9,80 miliardi di dollari e 9,85 miliardi di dollari. Si prevede che l'EPS diluito riportato sarà compreso tra 7,60 e 7,70 dollari, con un EPS diluito rettificato tra 8,85 e 8,95 dollari. La previsione riflette le recenti acquisizioni e l'impatto dell'Uragano Milton nel quarto trimestre, che si prevede avrà un effetto negativo sui ricavi netti di circa 15 milioni di dollari e sull'EPS di circa 8 centesimi.
Quest Diagnostics (NYSE: DGX) reportó resultados financieros sólidos en el tercer trimestre de 2024, con ingresos de 2.49 mil millones de dólares, un aumento del 8.5% en comparación con 2023. El rendimiento de la compañía se vio impulsado por nuevas contrataciones, expansión del negocio y recientes adquisiciones. El EPS diluido reportado aumentó un 1.5% a 1.99 dólares, mientras que el EPS diluido ajustado subió un 3.6% a 2.30 dólares.
Quest ha actualizado su guía para todo el año 2024, esperando ahora ingresos entre 9.80 mil millones de dólares y 9.85 mil millones de dólares. Se proyecta que el EPS diluido reportado estará entre 7.60 y 7.70 dólares, con un EPS diluido ajustado entre 8.85 y 8.95 dólares. La guía refleja las recientes adquisiciones y el impacto del Huracán Milton en el cuarto trimestre, que se espera que afecte negativamente los ingresos netos en aproximadamente 15 millones de dólares y el EPS en alrededor de 8 centavos.
퀘스트 진단(Quest Diagnostics, NYSE: DGX)은 2024년 3분기 강력한 재무 실적을 보고하며, 수익은 24억 9천만 달러, 8.5% 증가하였다고 발표했습니다. 회사의 성과는 새로운 고객 확보, 사업 확장 및 최근 인수에 의해 주도되었습니다. 보고된 희석 주당순이익(EPS)은 1.5% 증가하여 1.99달러, 조정된 희석 EPS는 3.6% 상승하여 2.30달러에 도달했습니다.
퀘스트는 2024년 전체 연도 가이던스를 업데이트하여 현재 수익을 98억 달러에서 98억 5천만 달러로 예상하고 있습니다. 보고된 희석 EPS는 7.60달러에서 7.70달러 사이가 될 것으로 예상되며, 조정된 희석 EPS는 8.85달러에서 8.95달러 사이입니다. 이번 가이던스는 최근 인수와 4분기 동안 밀턴 허리케인의 영향을 반영하며, 이는 순수익에 약 1500만 달러, EPS에 약 8센트를 부정적으로 영향을 미칠 것으로 예상됩니다.
Quest Diagnostics (NYSE: DGX) a reporté de solides résultats financiers pour le troisième trimestre 2024, avec des revenus de 2,49 milliards de dollars, en hausse de 8,5% par rapport à 2023. La performance de l'entreprise a été soutenue par l'acquisition de nouveaux clients, l'expansion des affaires et des acquisitions récentes. Le BPA dilué rapporté a augmenté de 1,5 % pour atteindre 1,99 dollar, tandis que le BPA dilué ajusté a progressé de 3,6 % pour atteindre 2,30 dollars.
Quest a mis à jour ses prévisions pour l'année 2024, prévoyant désormais des revenus compris entre 9,80 milliards de dollars et 9,85 milliards de dollars. Le BPA dilué rapporté devrait se situer entre 7,60 et 7,70 dollars, tandis que le BPA dilué ajusté devrait être compris entre 8,85 et 8,95 dollars. Les prévisions prennent en compte les récentes acquisitions et l'impact de l'ouragan Milton au quatrième trimestre, qui devrait avoir un effet négatif sur les revenus nets d'environ 15 millions de dollars et sur le BPA d'environ 8 cents.
Quest Diagnostics (NYSE: DGX) berichtete von starken finanziellen Ergebnissen im dritten Quartal 2024, mit einem Umsatz von 2,49 Milliarden Dollar, ein Anstieg um 8,5% im Vergleich zu 2023. Die Unternehmensleistung wurde durch neue Kundenakquisitionen, Geschäftsausweitung und jüngste Übernahmen angetrieben. Das gemeldete verwässerte EPS stieg um 1,5% auf 1,99 Dollar, während das bereinigte verwässerte EPS um 3,6% auf 2,30 Dollar anstieg.
Quest hat seine Prognose für das Gesamtjahr 2024 aktualisiert und erwartet nun einen Umsatz zwischen 9,80 Milliarden Dollar und 9,85 Milliarden Dollar. Das gemeldete verwässerte EPS wird zwischen 7,60 und 7,70 Dollar prognostiziert, während das bereinigte verwässerte EPS zwischen 8,85 und 8,95 Dollar liegt. Die Prognose spiegelt die jüngsten Übernahmen und die Auswirkungen des Hurrikans Milton im vierten Quartal wider, die voraussichtlich negative Auswirkungen auf die Nettoumsätze in Höhe von etwa 15 Millionen Dollar und auf das EPS von etwa 8 Cent haben werden.
- Total revenue growth of 8.5%, including 4.2% organic growth
- Adjusted diluted EPS increased 3.6% to $2.30
- Increased 2024 revenue guidance due to contributions from recent acquisitions
- On track to complete eight acquisitions by year-end
- Cash provided by operations increased 72.5% to $356 million
- Operating income decreased 3.3% to $330 million
- Operating income as a percentage of net revenues declined 1.6% to 13.3%
- Hurricane Milton expected to negatively impact Q4 net revenues by $15 million and EPS by 8 cents
Insights
Quest Diagnostics delivered a strong third quarter with 8.5% revenue growth to
The updated full-year 2024 guidance is particularly noteworthy. Revenue expectations have been raised to
Quest's acquisition strategy is paying off, with eight acquisitions planned by year-end. These strategic moves, including LifeLabs, are contributing to top-line growth and positioning the company for accelerated revenue and earnings growth in 2025. The maintained adjusted EPS guidance midpoint, despite hurricane impacts, demonstrates management's confidence in the company's operational efficiency and growth prospects.
Quest's performance reflects broader trends in the diagnostic services industry. The
The company's focus on M&A activity is strategic in a consolidating healthcare landscape. By targeting acquisitions that meet specific criteria for profitability, growth and returns, Quest is strengthening its competitive position and expanding its geographical footprint.
The
- Third quarter revenues of
$2.49 billion 8.5% from 2023 - Third quarter reported diluted earnings per share ("EPS") of
$1.99 1.5% from 2023; and adjusted diluted EPS of$2.30 3.6% from 2023 - Full year 2024 revenues now expected to be between
$9.80 billion $9.85 billion $7.60 $7.70 $8.85 $8.95
"We delivered a strong third quarter, with total revenue growth of
"We have increased our 2024 revenue guidance due to contributions from recent acquisitions and have maintained the midpoint of our adjusted EPS guidance despite the impact of Hurricane Milton in the fourth quarter," Mr. Davis continued. "Given the strength of our business and revenue from acquisitions, we are well positioned to drive accelerated revenue and earnings growth in 2025."
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||
2024 | 2023 | Change | 2024 | 2023 | Change | ||||||
(dollars in millions, except per share data) | |||||||||||
Reported: | |||||||||||
Net revenues | $ 2,488 | $ 2,295 | 8.5 % | $ 7,251 | $ 6,964 | 4.1 % | |||||
Diagnostic Information Services revenues | $ 2,427 | $ 2,228 | 9.0 % | $ 7,058 | $ 6,755 | 4.5 % | |||||
Revenue per requisition | 3.3 % | 1.7 % | |||||||||
Requisition volume | 5.5 % | 2.7 % | |||||||||
Organic requisition volume | 0.5 % | 0.7 % | |||||||||
Operating income (a) | $ 330 | $ 342 | (3.3) % | $ 985 | $ 995 | (1.0) % | |||||
Operating income as a percentage of net revenues (a) | 13.3 % | 14.9 % | (1.6) % | 13.6 % | 14.3 % | (0.7) % | |||||
Net income attributable to Quest Diagnostics (a) | $ 226 | $ 225 | 0.5 % | $ 649 | $ 662 | (1.9) % | |||||
Diluted EPS (a) | $ 1.99 | $ 1.96 | 1.5 % | $ 5.74 | $ 5.79 | (0.9) % | |||||
Cash provided by operations | $ 356 | $ 207 | 72.5 % | $ 870 | $ 745 | 17.0 % | |||||
Capital expenditures | $ 106 | $ 105 | 1.0 % | $ 302 | $ 336 | (10.4) % | |||||
Adjusted (a): | |||||||||||
Operating income | $ 385 | $ 380 | 1.3 % | $ 1,132 | $ 1,119 | 1.1 % | |||||
Operating income as a percentage of net revenues | 15.5 % | 16.6 % | (1.1) % | 15.6 % | 16.1 % | (0.5) % | |||||
Net income attributable to Quest Diagnostics | $ 262 | $ 254 | 3.1 % | $ 758 | $ 749 | 1.2 % | |||||
Diluted EPS | $ 2.30 | $ 2.22 | 3.6 % | $ 6.70 | $ 6.56 | 2.1 % | |||||
(a) | For further details impacting the year-over-year comparisons related to operating income, operating income as a percentage of net revenues, net income attributable to Quest Diagnostics, and diluted EPS, see note 2 of the financial tables attached below. |
Updated Guidance for Full Year 2024
The company updates its full year 2024 guidance as shown in the table below. The updated guidance reflects the impact of recent acquisitions including LifeLabs as well as the impact from Hurricane Milton in the fourth quarter. The company projects the disruption from Hurricane Milton to negatively impact net revenues by approximately
Updated Guidance | Prior Guidance | ||||||
Low | High | Low | High | ||||
Net revenues | |||||||
Net revenues increase | 5.9 % | 6.5 % | 2.7 % | 3.5 % | |||
Reported diluted EPS | |||||||
Adjusted diluted EPS | |||||||
Cash provided by operations | Approximately | Approximately | |||||
Capital expenditures | Approximately | Approximately | |||||
Note on Non-GAAP Financial Measures
As used in this press release the term "reported" refers to measures under accounting principles generally accepted in
Non-GAAP adjusted measures are presented because management believes those measures are useful adjuncts to GAAP results. Non-GAAP adjusted measures should not be considered as an alternative to the corresponding measures determined under GAAP. Management may use these non-GAAP measures to evaluate our performance period over period and relative to competitors, to analyze the underlying trends in our business, to establish operational budgets and forecasts and for incentive compensation purposes. We believe that these non-GAAP measures are useful to investors and analysts to evaluate our performance period over period and relative to competitors, as well as to analyze the underlying trends in our business and to assess our performance. The additional tables attached below include reconciliations of non-GAAP adjusted measures to GAAP measures.
Conference Call Information
Quest Diagnostics will hold its quarterly conference call to discuss financial results beginning at 8:30 a.m. Eastern Time today. The conference call can be accessed by dialing 888-455-0391 within the
A replay of the call may be accessed online at www.QuestDiagnostics.com/investor or, from approximately 10:30 a.m. Eastern Time on October 22, 2024 until midnight Eastern Time on November 5, 2024, by phone at 800-839-5154 for domestic callers or 203-369-3358 for international callers. Anyone listening to the call is encouraged to read our periodic reports, on file with the Securities and Exchange Commission, including the discussion of risk factors and historical results of operations and financial condition in those reports.
About Quest Diagnostics
Quest Diagnostics works across the healthcare ecosystem to create a healthier world, one life at a time. We provide diagnostic insights from the results of our laboratory testing to empower people, physicians and organizations to take action to improve health outcomes. Derived from one of the world's largest databases of de-identifiable clinical lab results, Quest's diagnostic insights reveal new avenues to identify and treat disease, inspire healthy behaviors and improve healthcare management. Quest Diagnostics annually serves one in three adult Americans and half the physicians and hospitals in
Forward Looking Statements
The statements in this press release which are not historical facts may be forward-looking statements. Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date that they are made and which reflect management's current estimates, projections, expectations or beliefs and which involve risks and uncertainties that could cause actual results and outcomes to be materially different. Risks and uncertainties that may affect the future results of the company include, but are not limited to, adverse results from pending or future government investigations, lawsuits or private actions, the competitive environment, the complexity of billing, reimbursement and revenue recognition for clinical laboratory testing, changes in government regulations, changing relationships with customers, payers, suppliers or strategic partners, acquisitions and other factors discussed in the company's most recently filed Annual Report on Form 10-K and in any of the company's subsequently filed Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, including those discussed in the "Business," "Risk Factors," "Cautionary Factors that May Affect Future Results" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" sections of those reports.
This earnings release, including the attached financial tables, is available online in the Newsroom section at www.QuestDiagnostics.com.
ADDITIONAL TABLES FOLLOW
Quest Diagnostics Incorporated and Subsidiaries Consolidated Statements of Operations For the Three and Nine Months Ended September 30, 2024 and 2023 (in millions, except per share data) (unaudited) | |||||||
Three Months Ended | Nine Months Ended | ||||||
2024 | 2023 | 2024 | 2023 | ||||
Net revenues | $ 2,488 | $ 2,295 | $ 7,251 | $ 6,964 | |||
Operating costs and expenses and other operating income: | |||||||
Cost of services | 1,677 | 1,541 | 4,865 | 4,647 | |||
Selling, general and administrative | 448 | 380 | 1,304 | 1,235 | |||
Amortization of intangible assets | 32 | 27 | 90 | 81 | |||
Other operating expense, net | 1 | 5 | 7 | 6 | |||
Total operating costs and expenses, net | 2,158 | 1,953 | 6,266 | 5,969 | |||
Operating income | 330 | 342 | 985 | 995 | |||
Other income (expense): | |||||||
Interest expense, net | (49) | (40) | (136) | (112) | |||
Other income (expense), net | 15 | (3) | 27 | 10 | |||
Total non-operating expense, net | (34) | (43) | (109) | (102) | |||
Income before income taxes and equity in earnings of equity method investees | 296 | 299 | 876 | 893 | |||
Income tax expense | (65) | (68) | (205) | (208) | |||
Equity in earnings of equity method investees, net of taxes | 6 | 6 | 14 | 18 | |||
Net income | 237 | 237 | 685 | 703 | |||
Less: Net income attributable to noncontrolling interests | 11 | 12 | 36 | 41 | |||
Net income attributable to Quest Diagnostics | $ 226 | $ 225 | $ 649 | $ 662 | |||
Earnings per share attributable to Quest Diagnostics' common stockholders: | |||||||
Basic | $ 2.01 | $ 1.99 | $ 5.80 | $ 5.87 | |||
Diluted | $ 1.99 | $ 1.96 | $ 5.74 | $ 5.79 | |||
Weighted average common shares outstanding: | |||||||
Basic | 112 | 112 | 111 | 112 | |||
Diluted | 113 | 114 | 112 | 114 | |||
Quest Diagnostics Incorporated and Subsidiaries Consolidated Balance Sheets September 30, 2024 and December 31, 2023 (in millions, except per share data) (unaudited) | |||
September 30, | December 31, | ||
Assets | |||
Current assets: | |||
Cash and cash equivalents | $ 764 | $ 686 | |
Accounts receivable, net | 1,376 | 1,210 | |
Inventories | 184 | 190 | |
Prepaid expenses and other current assets | 299 | 286 | |
Total current assets | 2,623 | 2,372 | |
Property, plant and equipment, net | 2,093 | 1,816 | |
Operating lease right-of-use assets | 661 | 602 | |
Goodwill | 8,605 | 7,733 | |
Intangible assets, net | 1,716 | 1,166 | |
Investments in equity method investees | 125 | 135 | |
Other assets | 272 | 198 | |
Total assets | $ 16,095 | $ 14,022 | |
Liabilities and Stockholders' Equity | |||
Current liabilities: | |||
Accounts payable and accrued expenses | $ 1,313 | $ 1,359 | |
Current portion of long-term debt | 603 | 303 | |
Current portion of long-term operating lease liabilities | 176 | 153 | |
Total current liabilities | 2,092 | 1,815 | |
Long-term debt | 5,648 | 4,410 | |
Long-term operating lease liabilities | 543 | 503 | |
Other liabilities | 891 | 876 | |
Redeemable noncontrolling interest | 80 | 76 | |
Stockholders' equity: | |||
Quest Diagnostics stockholders' equity: | |||
Common stock, par value | 2 | 2 | |
Additional paid-in capital | 2,332 | 2,320 | |
Retained earnings | 9,222 | 8,825 | |
Accumulated other comprehensive loss | (15) | (14) | |
Treasury stock, at cost; 50 shares and 51 shares as of September 30, 2024 and December 31, | (4,732) | (4,826) | |
Total Quest Diagnostics stockholders' equity | 6,809 | 6,307 | |
Noncontrolling interests | 32 | 35 | |
Total stockholders' equity | 6,841 | 6,342 | |
Total liabilities and stockholders' equity | $ 16,095 | $ 14,022 | |
Quest Diagnostics Incorporated and Subsidiaries Consolidated Statements of Cash Flows For the Nine Months Ended September 30, 2024 and 2023 (in millions) (unaudited) | |||
Nine Months Ended September 30, | |||
2024 | 2023 | ||
Cash flows from operating activities: | |||
Net income | $ 685 | $ 703 | |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 358 | 330 | |
Provision for credit losses | 4 | — | |
Deferred income tax benefit | (21) | (39) | |
Stock-based compensation expense | 61 | 58 | |
Other, net | 17 | 12 | |
Changes in operating assets and liabilities: | |||
Accounts receivable | (140) | (86) | |
Accounts payable and accrued expenses | (102) | (231) | |
Income taxes payable | 31 | — | |
Other assets and liabilities, net | (23) | (2) | |
Net cash provided by operating activities | 870 | 745 | |
Cash flows from investing activities: | |||
Business acquisitions, net of cash acquired | (1,781) | (611) | |
Capital expenditures | (302) | (336) | |
Other investing activities, net | 37 | — | |
Net cash used in investing activities | (2,046) | (947) | |
Cash flows from financing activities: | |||
Proceeds from borrowings | 1,846 | 1,703 | |
Repayments of debt | (302) | (1,426) | |
Exercise of stock options | 52 | 60 | |
Employee payroll tax withholdings on stock issued under stock-based compensation plans | (24) | (28) | |
Dividends paid | (247) | (234) | |
Distributions to noncontrolling interest partners | (35) | (41) | |
Other financing activities, net | (36) | (4) | |
Net cash provided by financing activities | 1,254 | 30 | |
Net change in cash and cash equivalents and restricted cash | 78 | (172) | |
Cash and cash equivalents and restricted cash, beginning of period | 686 | 315 | |
Cash and cash equivalents and restricted cash, end of period | $ 764 | $ 143 | |
Cash paid during the period for: | |||
Interest | $ 167 | $ 97 | |
Income taxes | $ 179 | $ 233 | |
Notes to Financial Tables
1) | The computation of basic and diluted earnings per common share is as follows: |
Three Months Ended | Nine Months Ended | ||||||
2024 | 2023 | 2024 | 2023 | ||||
(in millions, except per share data) | |||||||
Amounts attributable to Quest Diagnostics' common stockholders: | |||||||
Net income attributable to Quest Diagnostics | $ 226 | $ 225 | $ 649 | $ 662 | |||
Less: earnings allocated to participating securities | 1 | 2 | 3 | 4 | |||
Earnings available to Quest Diagnostics' common stockholders - basic and diluted | $ 225 | $ 223 | $ 646 | $ 658 | |||
Weighted average common shares outstanding - basic | 112 | 112 | 111 | 112 | |||
Effect of dilutive securities: | |||||||
Stock options and performance share units | 1 | 2 | 1 | 2 | |||
Weighted average common shares outstanding - diluted | 113 | 114 | 112 | 114 | |||
Earnings per share attributable to Quest Diagnostics' common stockholders: | |||||||
Basic | $ 2.01 | $ 1.99 | $ 5.80 | $ 5.87 | |||
Diluted | $ 1.99 | $ 1.96 | $ 5.74 | $ 5.79 | |||
2) | The following tables reconcile reported GAAP results to non-GAAP adjusted results: |
Three Months Ended September 30, 2024 | |||||||||||
(dollars in millions, except per share data) | |||||||||||
Operating | Operating net revenues | Income tax | Equity in investees, net of | Net income Diagnostics | Diluted EPS | ||||||
As reported | $ 330 | 13.3 % | $ (65) | $ 6 | $ 226 | $ 1.99 | |||||
Restructuring and integration charges (a) | 18 | 0.7 | (3) | — | 15 | 0.13 | |||||
Other charges (b) | 5 | 0.2 | — | — | 4 | 0.04 | |||||
Gains and losses on investments (c) | — | — | — | 2 | 2 | 0.02 | |||||
Other gains (d) | — | — | 2 | — | (6) | (0.06) | |||||
Amortization expense | 32 | 1.3 | (8) | — | 24 | 0.21 | |||||
ETB | — | — | (3) | — | (3) | (0.03) | |||||
As adjusted | $ 385 | 15.5 % | $ (77) | $ 8 | $ 262 | $ 2.30 | |||||
Nine Months Ended September 30, 2024 | |||||||||||
(dollars in millions, except per share data) | |||||||||||
Operating | Operating | Income tax | Equity in investees, net of | Net income | Diluted EPS | ||||||
As reported | $ 985 | 13.6 % | $ (205) | $ 14 | $ 649 | $ 5.74 | |||||
Restructuring and integration charges (a) | 45 | 0.6 | (10) | — | 35 | 0.31 | |||||
Other charges (b) | 12 | 0.2 | — | — | 11 | 0.10 | |||||
Gains and losses on investments (c) | — | — | (3) | 11 | 8 | 0.07 | |||||
Other gains (d) | — | — | 2 | — | (6) | (0.06) | |||||
Amortization expense | 90 | 1.2 | (23) | — | 67 | 0.59 | |||||
ETB | — | — | (6) | — | (6) | (0.05) | |||||
As adjusted | $ 1,132 | 15.6 % | $ (245) | $ 25 | $ 758 | $ 6.70 | |||||
Three Months Ended September 30, 2023 | |||||||||||
(dollars in millions, except per share data) | |||||||||||
Operating | Operating | Income tax | Equity in earnings of equity method | Net income | Diluted EPS | ||||||
As reported | $ 342 | 14.9 % | $ (68) | $ 6 | $ 225 | $ 1.96 | |||||
Restructuring and integration charges (a) | 6 | 0.3 | (1) | — | 5 | 0.05 | |||||
Other charges (b) | 5 | 0.2 | — | — | 5 | 0.04 | |||||
Amortization expense | 27 | 1.2 | (6) | — | 21 | 0.18 | |||||
ETB | — | — | (2) | — | (2) | (0.01) | |||||
As adjusted | $ 380 | 16.6 % | $ (77) | $ 6 | $ 254 | $ 2.22 | |||||
Nine Months Ended September 30, 2023 | |||||||||||
(dollars in millions, except per share data) | |||||||||||
Operating | Operating | Income tax | Equity in | Net income | Diluted EPS | ||||||
As reported | $ 995 | 14.3 % | $ (208) | $ 18 | $ 662 | $ 5.79 | |||||
Restructuring and integration charges (a) | 32 | 0.5 | (8) | — | 24 | 0.22 | |||||
Other charges (b) | 11 | 0.1 | (2) | — | 9 | 0.08 | |||||
Gains and losses on investments (c) | — | — | (1) | 3 | 2 | 0.02 | |||||
Amortization expense | 81 | 1.2 | (20) | — | 61 | 0.53 | |||||
ETB | — | — | (9) | — | (9) | (0.08) | |||||
As adjusted | $ 1,119 | 16.1 % | $ (248) | $ 21 | $ 749 | $ 6.56 | |||||
(a) | For both the three and nine months ended September 30, 2024 and 2023, the pre-tax impact represents costs primarily associated with workforce reductions and integration costs incurred in connection with further restructuring and integrating our business. The following table summarizes the pre-tax impact of restructuring and integration charges on our consolidated statements of operations: | |
Three Months Ended | Nine Months Ended | ||||||
2024 | 2023 | 2024 | 2023 | ||||
(dollars in millions) | |||||||
Cost of services | $ 5 | $ 2 | $ 19 | $ 12 | |||
Selling, general and administrative | 15 | 4 | 28 | 20 | |||
Other operating expense, net | (2) | — | (2) | — | |||
Operating income | $ 18 | $ 6 | $ 45 | $ 32 | |||
(b) | For the periods presented other operating expense, net includes pre-tax losses associated with the increase in the fair value of the contingent consideration accrual associated with previous acquisitions. Additionally, for the nine months ended September 30, 2023, selling, general and administrative expenses includes the impairment of a corporate facility that was sold. The following table summarizes the pre-tax impact of these other items on our consolidated statements of operations: | |
Three Months Ended | Nine Months Ended | ||||||
2024 | 2023 | 2024 | 2023 | ||||
(dollars in millions) | |||||||
Selling, general and administrative | $ 1 | $ 1 | $ 2 | $ 7 | |||
Other operating expense, net | 4 | 4 | 10 | 4 | |||
Operating income | $ 5 | $ 5 | $ 12 | $ 11 | |||
(c) | For both the three and nine months ended September 30, 2024 and for the nine months ended September 30, 2023, the pre-tax impact represents gains and losses associated with changes in the carrying value of our strategic investments, recorded in equity in earnings of equity method investees, net of taxes. | |
(d) | For the three and nine months ended September 30, 2024, other income (expense), net includes a non-recurring | |
(e) | For restructuring and integration charges, gains and losses on investments, other charges and gains, and amortization expense, income tax impacts, where recorded, were primarily calculated using combined statutory income tax rates of |
3) | The outlook for adjusted diluted EPS represents management's estimates for the full year 2024 before the impact of special items. Further impacts to earnings related to special items may occur throughout 2024. Additionally, the amount of ETB is dependent upon employee stock option exercises and our stock price, which are difficult to predict. The following table reconciles our 2024 outlook for diluted EPS under GAAP to our outlook for adjusted diluted EPS: |
Low | High | ||
Diluted EPS | $ 7.60 | $ 7.70 | |
Restructuring and integration charges (a) | 0.34 | 0.34 | |
Amortization expense (b) | 0.85 | 0.85 | |
Other charges (c) | 0.12 | 0.12 | |
Gains and losses on investments (d) | 0.07 | 0.07 | |
Other gains (e) | (0.06) | (0.06) | |
ETB | (0.07) | (0.07) | |
Adjusted diluted EPS | $ 8.85 | $ 8.95 |
(a) | Represents estimated pre-tax charges of | |
(b) | Represents estimated pre-tax amortization expenses of | |
(c) | Principally represents estimated pre-tax net losses of | |
(d) | Represents | |
(e) | Includes a non-recurring |
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SOURCE Quest Diagnostics
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