By Sahil Pandey
April 21 (Reuters) – Quest Diagnostics on Tuesday raised its forecast for 2026 profit and revenue after posting first-quarter results above Wall Street estimates, citing resilient demand for routine diagnostic testing.
Shares of the New Jersey-based company were up about 4% in early trading.
The company posted organic revenue growth of about 9% in the first quarter, with demand broad-based across hospital laboratory management contracts, physician offices and its direct-to-consumer testing business, Quest CEO Jim Davis said in an interview with Reuters.
Growth from partnerships with consumer health and wearable companies also supported performance, he added.
PRICING STEADY DESPITE MIX SHIFT
Davis said per-test pricing was flat during the quarter and that the decline in average revenue per test reflected a higher share of routine testing linked to newer partnerships.
Chief Financial Officer Sam Samad said excluding those contracts, revenue per test rose about 2.5%, supported by patients receiving more tests per visit and stronger demand for advanced diagnostics.
Quest’s Diagnostic Information Services unit, its largest business, reported quarterly revenue of $2.83 billion, up 9.4% from a year earlier, as organic testing volumes rose 10.8%.
Partnerships with Corewell Health and Fresenius Medical Care accounted for roughly 7% of volume growth during the quarter, Samad said.
CEO Davis highlighted double-digit growth in advanced diagnostics, including blood tests used to help identify Alzheimer’s disease and cardiometabolic and endocrine tests.
CFO Samad said productivity gains from automation and artificial intelligence are helping offset higher labor costs, with operating margins expected to improve in the second half.
FORECAST ABOVE WALL STREET VIEWS
Quest now expects full-year revenue of $11.78 billion to $11.90 billion, above analysts’ average estimate of about $11.75 billion, according to LSEG data. It had previously forecast revenue of $11.70 billion to $11.82 billion.
The company expects adjusted profit per share between $10.63 and $10.83, up from $10.50 to $10.70 and above estimates of about $10.55.
Quest reported first-quarter revenue of $2.90 billion, ahead estimates of $2.83 billion, while adjusted profit of $2.50 per share topped expectations of $2.35.
(Reporting by Sahil Pandey in Bengaluru; Editing by Shailesh Kuber)
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