Quest Diagnostics reported a dip in earnings Thursday for its second quarter due to debt restructuring, while also enjoying a modest bump in revenue.
Quest, which has engaged in a number of M&A and joint venture deals lately, reported net income of $118 million during the three months ended June 30, down 11.3% from $133 million during the same period the year before.
Though operating expenses were mostly stable, the Madison, N.J., company, the world's biggest provider of diagnostic testing services, reported $64 million in pretax charges related to debt refinancing.
At $1.9 billion, revenue increased an overall 1.2% year over year, but only 0.8% before the impact of acquisitions.
Steve Rusckowski, Quest's president and CEO, attributed this to strong performance in BRCA cancer risk testing, HIV testing and its Cardiac IQ screening product. He noted during a conference call Thursday that Quest also saw growth in its prescription drug monitoring business, which monitors pain management patients through periodic urine drug testing.
Six-month income was $179 million, down 24.5% from the same period last year. Debt restructuring charges added up to $142 million. Revenue was $3.8 billion, up 3.2% from the same six months year before.
After a series of recent deals, Rusckowski said he is optimistic about the company's M&A outlook. At the end of June, Quest agreed to acquire the outreach laboratory testing business of Fountain Valley, Calif-based MemorialCare Health System, and earlier this year decided to engage Quintiles, a provider of biopharmaceutical development and commercial outsourcing services, in a joint venture to offer clinical trials laboratory services.
Rusckowski also commented on lab startup Therano's recent breakthrough deal with Capital BlueCross which will allow members to obtain lab tests at Capital BlueCross and Theranos stores with just a few drops of blood at prices that are posted on the company's website. He said he's been assured that Quest continues to be the insurer's preferred lab provider and its only national lab vendor.
“We actually extended our longstanding relationship with Capital Blue with a contract renew in January of last year,” said Rusckowski, who earlier noted that Quest is “well-positioned to become a consumer-friendly diagnostic testing provider.”
