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Quest Diagnostics 1Q net income falls 15 percent

MADISON, N.J. (AP) -- Quest Diagnostics posted a 15 percent drop in net income for the first quarter Wednesday, as people cut back on medical spending during the economic recovery and more Medicare reimbursements cut into revenue.

The company also cited fewer business days in the period.

Net income fell to $135.8 million, or 85 cents per share, from $159.1 million, or 99 cents per share. Excluding one-time costs and gains Quest said it earned 89 cents per share in the latest quarter.

Revenue fell 6 percent, to $1.79 billion from $1.91 billion.

The company edged out revenue expectations on Wall Street, but it's profit fell shy of the $1.03 per share that analyst were looking for, according to FactSet.

Quest said requests for testing fell about 3 percent and revenue per request also fell 3 percent. The company has said it expects a stronger performance during the second half of the year, and shares rose in early trading.

The company still expects to earn between $4.35 and $4.55 per share in 2013.

Revenue will be about the same as last year, Quest said, when it reported $7.38 billion in total revenue. The company earlier had said it expected revenue of as much as $7.46 billion.

Analysts are forecasting net income of $4.41 per share and $7.38 billion in revenue on average.

Quest also said Wednesday that it will buy assets from the Dignity Healthcare hospital system in California and Nevada. Quest is buying the system's outreach diagnostic information services, which hospitals to physicians and patients outside of the hospitals. The company's hospital labs are not part of the deal.

The acquisition is expected to close in June. No financial terms were released, but Quest said that the buyout won't affect its 2013 profit, and will make a small contribution to net income in 2014.

Shares of Quest Diagnostics Inc. rose 22 cents in early trading to $58.57.