Quest Diagnostics Incorporated (NYSE: DGX), the world's leading provider of diagnostic information services, announced today preliminary financial results for the second quarter ended June 30, 2020. 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.
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.
About Quest Diagnostics
Quest Diagnostics empowers people to take action to improve health outcomes. Derived from the world's largest database of clinical lab results, our diagnostic insights reveal new avenues to identify and treat disease, inspire healthy behaviors and improve health care management. Quest annually serves one in three adult Americans and half the physicians and hospitals in the United States, and our 47,000 employees understand that, in the right hands and with the right context, our diagnostic insights can inspire actions that transform lives. www.QuestDiagnostics.com.
About COVID-19 Testing at Quest Diagnostics
Quest Diagnostics is at the forefront of the response to the COVID-19 pandemic, working to broaden access to laboratory insights to help us all lead healthier lives. We provide?both?molecular diagnostic and antibody?serology?tests to?aid in?the diagnosis of COVID-19 and?immune response.?Our?COVID-19 test services?are based on?tests?that?have received Food and Drug Administration ("FDA") emergency use authorization ("EUA")?and which?also?meet our high standards for quality.?We are providing these test services under the Public Readiness and Emergency Preparedness Act. We provide?data on?COVID-19?testing?to various federal and state public health authorities, including the Centers for Disease Control and Prevention, and participate in studies with government and private institutions,?aiding?COVID-19?public health?response?and research.?Through?our team of?dedicated?phlebotomists, air fleet team, couriers and?laboratory professionals, Quest Diagnostics?works hard every day to help patients and communities across the United States access quality?COVID-19 testing.???
The antibody tests and the molecular tests (together "All tests") have not been FDA cleared or approved. All tests have been authorized by the FDA under EUAs for use by authorized laboratories. The antibody tests have been authorized only for the detection of IgG antibodies against SARS-CoV-2, not for any other viruses or pathogens. The molecular tests have been authorized only for the detection of nucleic acid from SARS-CoV-2, not for any other viruses or pathogens. All tests are only authorized for the duration of the declaration that circumstances exist justifying the authorization of emergency use of in vitro diagnostics for detection and/or diagnosis of COVID-19 under 21 U.S.C. § 360bbb-3(b)(1), unless the authorization is terminated or revoked sooner.