On July 13, 2020 Quest Diagnostics Incorporated (NYSE: DGX), the world’s leading provider of diagnostic information services, reported that preliminary financial results for the second quarter ended June 30, 2020 (Press release, Quest Diagnostics, JUL 13, 2020, View Source [SID1234561818]). The results reflect stronger than forecasted recovery in base testing volumes (excluding COVID-19 molecular and antibody testing) as well as growing demand for COVID-19 testing services.
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Preliminary second quarter 2020 reported revenue is expected to be approximately $1.83 billion, a decline of approximately 6% versus the 2019 period. Volume, measured by the number of requisitions, declined approximately 18% versus the prior year. Testing volumes in the company’s base business (excluding COVID-19 molecular and antibody testing) declined approximately 34% versus the prior year.
Preliminary reported diluted earnings per share from continuing operations ("EPS") for the second quarter 2020 is expected to be between $1.33 and $1.36 compared to $1.51 in 2019. Preliminary adjusted diluted EPS for the second quarter 2020 is expected to be between $1.39 and $1.42 compared to $1.73 in 2019 and excludes $65 million that the company received in the second quarter of 2020 from the initial tranche of funds that were appropriated to healthcare providers under the Coronavirus Aid, Relief, and Economic Security Act ("CARES Act") for expenses or lost revenues that are attributable to the COVID-19 pandemic. Both preliminary reported and adjusted diluted EPS exclude any proceeds that we may receive from the secondary tranche of funds distributed to healthcare providers under the CARES Act.
The company will report second quarter 2020 results on Thursday, July 23, 2020 and conduct a conference call at which time it will provide further detail on second quarter performance as well as updates on the impact of the COVID-19 pandemic.
The company continues to believe that the pandemic’s impact on its future operating results, cash flows and/or financial condition will be primarily driven by: the pandemic’s severity and duration; the pandemic’s impact on the U.S. healthcare system and the U.S. economy; and the timing, scope and effectiveness of federal, state and local governmental responses to the pandemic which are drivers beyond the company’s knowledge and control.
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, certain financial impacts resulting from the COVID-19 pandemic, amortization expense, excess tax benefits ("ETB") associated with stock-based compensation, 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.
Second Quarter 2020 Earnings Release Scheduled for July 23, 2020
The company will report second quarter 2020 results on Thursday, July 23, 2020, before the market opens. It will hold its quarterly conference call to discuss the results beginning at 8:30 a.m. Eastern Time on that day.
The conference call can be accessed by dialing 888-455-0391 within the U.S. and Canada, or 773-756-0467 internationally, using the passcode: "7895081." The earnings release and live webcast will be posted on 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 888-566-0435 for domestic callers or 402-998-0605 for international callers; no passcode is required. Telephone replays will be available from approximately 10:30 a.m. Eastern Time on July 23, 2020 until midnight Eastern Time on August 6, 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.