People volunteer for Covid-19 surveillance tests using the self-administered PCR test of Quest Diagnostics on July 12, 2020 in Livingston, Montana.
William Campbell | Getty Images
Quest Diagnostics said Thursday that the continued high demand for Covid-19 testing helped boost record revenue and earnings for the company in the fourth quarter and during 2020.
While the coronavirus pandemic disrupted routine blood tests and molecular tests that make up a large part of the business, Quest gradually increased its ability to perform Covid-19 tests last year.
Here’s how Quest outperformed what Wall Street expected, based on average analyst estimates compiled by Refinitiv:
- Custom EPS: $ 4.48 versus $ 4.24 expected.
- Revenue: $ 3 billion expected against $ 2.93 billion.
The company had net revenue of more than $ 3 billion for the quarter ended December 31, up nearly 56% from $ 1.93 billion in the same period in 2019. On an unadjusted basis, the company’s profits more than doubled to $ 579 million from $ 253 million during the same period last year.
“In a year dominated by the pandemic, Quest brought critical COVID-19 tests to our country and delivered record revenues, earnings and cash from operations for the fourth quarter and full year 2020.” statement.
Rusckowski announced that the company would increase its dividend by 10.7% to 62 cents per quarter and allow a $ 1 billion increase in its buyback plan.
Quest and other major diagnostic labs were at the center of research during the summer, when demand for Covid-19 testing services rose dramatically amid an increase in infections in parts of the country, particularly the Sun Belt. In July, the company acknowledged that it takes more than a week to reverse the coronavirus test results for most patients, just like competitors like LabCorp.
Politicians urged the laboratories on what caused the delay in the turnaround, while some public health specialists asked to study and introduce new types of tests. Although some progress has been made with the development of new antigen tests for rapid reversal, PCR molecular tests, such as those processed by Quest ‘laboratories, remain the gold standard in the country.
CEO Rusckowski noted that the company’s non-Covid business recovered during the summer and fall as new cases fell daily in the U.S., but the recovery stopped as the country approached winter and another increase in cases.
“Declines in our base business recovered rapidly during the summer and fall, but the recovery came to a halt in late November and December due to the increase in COVID-19 infections across the country,” Rusckowski said. “The continued demand for COVID-19 testing has increased our performance through the second half of the year.”
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