, the largest provider of laboratory testing services, said that profits fell in the first quarter of this year, with the harsh winter weather as a primary driver of the quarterly decline.
Net income was $104 million in the first quarter of 2014, down 23.5% from $136 million in the same quarter of 2013
. First-quarter revenue fell 2.3% to $1.75 billion, compared with about $1.78 billion in the first quarter of last year. Revenue for diagnostic information services dropped by 2.1%.
Quest Diagnostics reported that restructuring and integration costs associated with recent acquisitions including Solstas Lab Partners Group and Summit Health
negatively affected first-quarter results but executives said they expect revenue growth in the second quarter.
As payers shift more cost-sharing to patients, patients have put off physician's visits and lab work over concerns about costs. The slowdown in utilization
as well as cuts in reimbursement have led Quest to broaden its offerings, including by developing partnerships or ventures with healthcare providers.
The Madison, N.J.-based company announced Thursday that it had acquired the rest of Steward Health Care System's outreach laboratory service operations and would provide those services to the physicians, nursing homes and other healthcare providers that work with the Boston-based system. Financial terms of the deal were not disclosed.
Quest acquired outreach labs from Dignity Health, based in San Francisco, and UMass Memorial Medical Center, Worcester, Mass., last year.
“We expect to show positive revenue growth beginning in the second quarter of 2014 and throughout the remainder of the year,” said Steve Rusckowski, Quest Diagnostics' president and CEO. “We continue to make progress on our top priority of restoring growth, have completed three acquisitions so far this year and recently signed a laboratory professional services relationship with our first integrated delivery network.”
The company expects revenue to increase by up to 4% in 2014. Rusckowski told analysts during a call that Quest continues to view the Affordable Care Act as a net positive for the lab services industry, but the growth will be more likely to be seen in the long term. Follow Jaimy Lee on Twitter: @MHjlee