Will Quest Diagnostics (DGX) Miss This Quarter?


Quest Diagnostics Inc. (DGX) is scheduled to report its fourth-quarter 2013 results before the opening bell on Jan 30. Last quarter, Quest Diagnostics had posted a negative earnings surprise of 1.92%. Let’s see how things are shaping up for this announcement.

Factors at Play

Quest Diagnostics has delivered negative earnings surprises in all of the last four quarters with an average miss of 5.73%.

Although the company’s massive organizational restructuring strategy implemented since Jan 2013 to increase operational efficiency and restore growth is encouraging, near-term visibility remains a matter of concern. In addition, Quest Diagnostics is continuously witnessing challenges with respect to testing volume. Moreover, lower healthcare utilization and reimbursement pressure from government and other payers continue to pose threats.

Meanwhile, Quest Diagnostics has been focusing on high-potential areas such as gene-based esoteric testing for cancer, cardiovascular disease, infectious disease and neurological disorders.

Earnings Whispers?

Our proven model does not conclusively show that Quest Diagnostics is likely to beat earnings this quarter. That is because a stock needs to have both a positive Earnings ESP (Expected Surprise Prediction) and a Zacks Rank #1, 2 or 3 for this to happen. That is not the case here as you will see below.

Zacks ESP: Earnings ESP for Quest Diagnostics is 0.00% since the Most Accurate estimate stands at $0.94, in line with the Zacks Consensus Estimate.

Zacks Rank: Quest Diagnostics’ Zacks Rank #4 (Sell) when combined with a 0.00% ESP, makes surprise prediction difficult.

Other Stocks to Consider

Here are some other companies you may want to consider as our model shows that they have the right combination of elements, i.e., a positive Zacks Earnings ESP and a Zacks Rank #1, #2 or #3.

DexCom, Inc. (DXCM) has an Earnings ESP of +14.29% and holds a Zacks Rank #2 (Buy). DexCom is expected to report its fourth quarter earnings on Feb 20.

Cardinal Health, Inc. (CAH) has an Earnings ESP of +2.41% and holds a Zacks Rank #2. Cardinal Health will report second quarter fiscal 2014 earnings on Jan 30.

Symmetry Medical, Inc. (SMA) has an Earnings ESP of +14.29% and holds a Zacks Rank #3 (Hold). Symmetry Medical will be reporting fourth quarter earnings on Feb 20.

Read the Full Research Report on DGX
Read the Full Research Report on CAH
Read the Full Research Report on SMA
Read the Full Research Report on DXCM

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