Quest Diagnostics shares jump 3.8% premarket as earnings beat on demand for COVID-19 tests

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Quest Diagnostics Inc. shares jumped 3.8% in premarket trade Thursday, after the company beat third-quarter earnings estimates and raised guidance, buoyed by demand for COVID-19 testing. Secaucus, N.J.-based Quest said it had net income of $568 million, or $4.14 a share, in the quarter, up from $215 million, or $1.56 a share, in the year-earlier period. Adjusted per-share earnings came to $4.31, ahead of the $3.72 FactSet consensus. Revenue rose to $2.786 billion from $1.956 billion, also ahead of the $2.722 billion FactSet consensus. “Quest had a very strong third quarter, benefiting from continued demand for COVID-19 testing and the rapid recovery of health care utilization,” Chief Executive Steve Rusckowski said in a statement. “Quest Diagnostics. “Quest has performed over 22 million COVID-19 molecular and serology tests to date, more than any other provider.” The company is seeing signs that the health care system is returning to pre-pandemic levels, as based testing volume, excluding COVID-19 molecular and antibody testing, continued to recover through the quarter. “We are grateful for the CARES Act funding that provided our company with support earlier this year at a time of great uncertainty for our nation,” said Rusckowski. “Several months into this pandemic, we do not require this funding. As a result, we believe returning these funds to the government now is the right thing to do.” The company raised its guidance and now expects revenue to range from $8.8 billion to $9.1 billion, up from prior guidance of $8.4 billion to $8.8 billion. It expects adjusted EPS of $9.00 to $10.00, compared with prior guidance of $7.50 to $9.00. The FactSet consensus is for EPS of $8.82 and sales of $8.8 billion. Shares have gained 15% in the year to date, while the S&P 500 has gained 6.3%.
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