Quest Diagnostics beats profit estimates as routine testing demand returns

Bengaluru: Quest Diagnostics Inc posted first-quarter profit ahead of Wall Street estimates on Thursday as its base business helped offset a fall in COVID-19 test kits sales.

Demand for routine diagnostic tests has picked up as an increasing number of people return to the healthcare system for routine care after delaying care during the pandemic.

Healthcare giant Abbott Laboratories and hospital operator HCA Healthcare Inc last week sounded optimistic about demand for medical device procedures, routine diagnostic testing and consumer-based health products, as cases of COVID-19 infection decline.

Sales at Quest Diagnostics's base business excluding COVID-19 products rose 10% from a year earlier to $2.21 billion.

Global sales of its COVID-19 test kits slumped 80.2% to $119 million and the company lowered its annual COVID-19 sales forecast to between $150 million and $200 million from $175 million to $275 million, as the U.S. government plans to end the COVID-19 Public Health Emergency next month.

Separately, Quest said it would buy cancer test developer Haystack in an all-cash deal worth up to $450 million, which consists of $300 million on the deal's closure and up to $150 million in potential milestone payments.

The deal will bulk up Quest Diagnostic's advanced testing portfolio and is expected to be completed by the second quarter. It will be modestly dilutive to the company's profit over the next three years.

Excluding one-off items, Quest's profit was $2.04 per share for the quarter ended March 31, higher than analysts' average estimate of $1.97 cents per share, according to Refinitiv data.

The company revised its annual adjusted profit forecast to between $8.45 per share and $8.95 per share from $8.40 per share and $9 per share.