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Quest Diagnostics boosts forecasts on strong COVID-19 test demand

Quest Diagnostics boosts forecasts on strong COVID-19 test demand

FILE PHOTO: A test tube labelled "COVID-19 Test positive" is seen in this illustration picture taken, March 10, 2021. REUTERS/Dado Ruvic/Illustration

Quest Diagnostics on Thursday (Oct 21) raised its annual revenue and profit forecasts after it beat estimates for quarterly results, on strong demand for its COVID-19 tests due to the spread of the virulent Delta variant in the United States.

Shares of the US laboratory rose about 4 per cent before the bell.

COVID-19 testing volumes in the US had slumped in the first half of this year, but demand rose once again in recent months due to the Delta variant, leading employers and schools to implement strict screening programs.

Diagnostic companies like Abbott Laboratories have said demand for COVID-19 tests rebounded during the quarter.

The country witnessed a swift rise in the number of COVID-19 cases since July, reaching a peak of more than 190,000 new cases daily in early September, according to data from the Centers for Disease Control and Prevention.

In September, President Joe Biden announced policies requiring large employers to have their workers inoculated or tested weekly.

However, Quest said in late summer it saw some softness in its base business across the country, but saw an overall rebound in September.

"Our base business continued to improve sequentially in the third quarter which speaks to the ongoing recovery," said Chief Executive Officer Steve Rusckowski.

The company raised its full-year profit outlook to US$13.50 to US$13.90, from US$11.65 to US$12.35. Analysts on an average estimate US$11.93.

Excluding items, Quest earned US$3.96 per share for the third quarter ended Sep 30, beating analysts' estimates of US$2.88, according to Refinitiv data.

Revenue fell to US$2.77 billion from US$2.79 billion, but came ahead of analysts' estimate of US$2.45 billion.

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Source: Reuters/jt

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