Quest Diagnostics Inc. (NYSE:DGX) Q4 2014 Earnings Conference Call - Final Transcript

Jan 29, 2015 • 08:30 am ET

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Quest Diagnostics Inc. (NYSE:DGX) Q4 2014 Earnings Conference Call - Final Transcript

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Executive
Mark Guinan

share of $4.10.

We built our guidance with a framework that would deliver approximately a 6% to 10% improvement in performance on our 2014 adjusted earnings per share figure. We then added in the anticipated impact of amortization based on our current amortization schedules. The amortization for 2015 is estimated to be slightly lower than what it was in 2014. Based on that math and our view of the business, we are now sharing a guidance range for adjusted diluted earnings per share excluding amortization of $4.70 to $4.85.

Given our strategy to acquire 1% to 2% in growth each year and the continued need to pay down some debt, you should not anticipate share buybacks beyond the level to meet our majority of free cash flow commitment and the need to prevent any dilution. We also continue to evaluate our portfolio so should we monetize any significant assets, this could change. Finally on cash from operations, please note the forecasted reduction versus 2014 despite an anticipated increase in operating income is driven primarily by two factors.

First, given the way the calendar falls out, we have an extra payroll cycle in 2015. This additional payroll cycle is not material to our cash liquidity. The second driver is the payout of accrued management compensation which was depressed in 2014. Based on these considerations, we expect full-year 2015 results from continuing operations before special items as follows revenues to increase between 2% to 3%

Executive
Mark Guinan

compared to 2014,adjusted diluted earnings per share excluding amortization expense to be between $4.70 and $4.85; cash provided by operations to approximate $850 million, and capital expenditures to approximate $300 million.Now let me turn it back to Steve.

Executive
Steve Rusckowski

Thanks, Mark. Well to summarize, we delivered solid top and bottom line growth in the fourth quarter. In doing so, we reported organic revenue growth as we continue to build momentum. We have made good progress executing on our strategy. As a result, we have met our commitments for 2014, raised our dividend once again and have provided guidance for 2015 that shows continued improvement.We thank you for joining us this morning and we would be happy to take any of your questions. Operator?.