Quest Diagnostics Inc DGX posted Q2 FY23 adjusted EPS of $2.30, down 2.5% Y/Y, beating the consensus of $2.27.

Sales came in at $2.34 billion, a decline of 4.7% Y/Y, higher than the Wall Street estimate of $2.25 billion.

COVID-19 testing revenues slumped 88% to $41 million, while Base business revenues improved 9.5% to $2.29 billion.

Adjusted operating income declined 10.4% to $389 million, and net income fell 6.8% to $263 million.

Also Read: FDA Readies Proposal for Increased Oversight on Lab-developed Tests.

Adjusted operating margin compressed to 16.7% from 17.7% a year ago.

Jim Davis, Chairman, CEO & President, commented, "We had strong base business performance in the second quarter, with nearly double-digit revenue growth year over year. Demand for our services remained strong, boosted by the collaborations we have forged with health plans, hospitals, and physicians amid a continued return to care. We are particularly encouraged by revenue growth in our base business of nearly ten percent from our health system customers."

Outlook: Quest Diagnostics revises FY23 revenue guidance to $9.12 billion-$9.22 billion vs. consensus of $9.06 billion and prior guidance of $8.93 billion-$9.08 billion.

The guidance includes base business revenues of $8.92 billion-$9.02 billion compared to the previous range of $8.78 billion-$8.88 billion.

The company sees COVID-19 testing revenues of approximately $200 million versus $150 million - $200 million expected earlier.

The company forecasts adjusted EPS of $8.50-$8.90 compared to the consensus of $8.69 and the prior guidance of $8.45-$8.95.

Price Action: DGX shares are down 4.35% at $138.61 on the last check Wednesday.