On January 30, 2020 Quest Diagnostics Incorporated (NYSE: DGX), the world’s leading provider of diagnostic information services, reported financial results for the fourth quarter and full year ended December 31, 2019 (Press release, Quest Diagnostics, JAN 30, 2020, View Source [SID1234553702]).
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"We had a solid fourth quarter and ended the year by delivering record revenues, earnings and cash from operations," said Steve Rusckowski, Chairman, CEO and President. "Strong volume growth from expanded health plan network access, combined with outstanding execution of our Operational Excellence strategy, helped us offset significant reimbursement pressure.
"Quest is well positioned once again in 2020 to deliver on our commitment to grow revenues and earnings. We have a strong value proposition that supports health care’s triple aim of improving medical quality and the patient experience while reducing the cost of care. Our guidance for 2020 reflects our continued momentum, partially offset by yet another year of meaningful reimbursement pressure."
For further details impacting the year-over-year comparisons related to operating income, operating income as a percentage
of net revenues, income from continuing operations attributable to Quest Diagnostics, and diluted EPS from continuing
operations, see note 2 of the financial tables attached below.
Beginning in 2019, the company has changed how it presents adjusted income measures to additionally exclude amortization
expense for all periods presented. We believe this presentation provides investors with additional insight to evaluate our
performance period over period and relative to competitors, as well as to analyze the underlying trends in our business.
Dividend and Share Repurchase Authority Increased
Quest Diagnostics’ Board of Directors authorized a 5.7% increase in its quarterly dividend from $0.53 to $0.56 per share, or $2.24 per share annually, payable on April 21, 2020 to shareholders of record of Quest Diagnostics common stock on April 7, 2020. This dividend increase is the company’s ninth since 2011.
The Board also increased the company’s share repurchase authorization by $1 billion, bringing the total authorization available to $1.2 billion as of December 31, 2019.
Guidance for Full Year 2020
The company estimates full year 2020 results as follows:
Note on Non-GAAP Financial Measures
As used in this press release the term "reported" refers to measures under accounting principles generally accepted in the United States ("GAAP"). The term "adjusted" refers to non-GAAP operating performance measures that exclude special items such as restructuring and integration charges, amortization expense, excess tax benefits ("ETB") associated with stock-based compensation, the gain associated with the sale and leaseback of a property, and other items.
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 U.S. and Canada, or 773-756-0467 internationally, passcode: Investor; or via live webcast on the company’s website at www.QuestDiagnostics.com/investor. The company suggests participants dial in approximately 10 minutes before the call.
A replay of the call may be accessed online at www.QuestDiagnostics.com/investor or by phone at 866-357-4210 for domestic callers or 203-369-0125 for international callers. No passcode is required. Telephone replays will be available from approximately 10:30 a.m. Eastern Time on January 30, 2020 until midnight Eastern Time on February 13, 2020. Anyone listening to the call is encouraged to read the company’s 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.