People volunteer for Covid-19 surveillance tests using the Quest Diagnostics self-administered PCR test on July 12, 2020 in Livingston, Montana.
William Campbell | Getty Images
Quest Diagnostics said on Thursday that continued high demand for Covid-19 testing has contributed to record sales and profits for the company in the fourth quarter and in 2020.
While the coronavirus pandemic has disrupted routine blood and molecular testing, which makes up the bulk of the company’s operations, last year Quest has steadily increased its capacity to conduct Covid-19 testing.
Here’s how Quest fared against what Wall Street expected, based on average analyst estimates compiled by Refinitiv:
- Adjusted EPS: Expected $ 4.48 vs. $ 4.24.
- Revenue: $ 3 billion vs. $ 2.93 billion expected.
The company reported net sales of more than $ 3 billion for the quarter ended December 31, an increase of nearly 56% from $ 1.93 billion in the same period in 2019. On an unadjusted basis, the The company’s profits more than doubled to $ 579 million from $ 253 million during the same time in the previous year.
“In a year dominated by the pandemic, Quest brought critical COVID-19 testing to our country and delivered record sales, profit and cash from operations for the fourth quarter and full year 2020,” said the chairman and CEO of Quest Steve Rusckowski in a statement.
Rusckowski announced that the company will increase its dividend by 10.7% to 62 cents per quarter and allow a $ 1 billion increase in its share buyback plan.
Quest and other major diagnostic labs were the center of attention during the summer, as demand for Covid-19 testing services soared amid a resurgence of infections in parts of the country, most notably the Sun Belt. In July, the company acknowledged that it took more than a week to bypass coronavirus test results for most patients, as it did with competitors like LabCorp.
Politicians urged the labs to see what caused the slowdown in the turnaround, while some public health specialists called for study and testing new species. While some progress has been made in developing new fast turnaround antigen assays, molecular PCR assays, such as those handled by Quest’s 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 began to fall in the US daily, but the recovery halted as the country approached winter and another spate of cases.
“The decline in our base business recovered rapidly during the summer and fall, but the recovery halted in late November and December due to the increase in COVID-19 infections across the country,” Rusckowski said. “Continued high demand for COVID-19 testing has boosted our performance during the second half of the year.”
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