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Quest Diagnostics ( DGX) reported on April 21, 2009 that its Q1 FY09 earnings increased 19.7% to $167.10 million or $0.88 per share from $139.60 million or $0.71 per share in Q1 FY08 on higher revenue. Income from continuing operations climbed 20.0% to $177.40 million or $0.89 per share, which beat the most recent consensus estimate of $0.82 per share.

Total revenue grew 1.3% to $1.81 billion from $1.78 billion in Q1 FY08. Clinical testing revenue, which accounted for over 90.0% of total revenue, increased 2.2% year-over-year. Revenue per requisition increased 4.1%, driven by a positive mix, while clinical testing volume, a measure of the number of requisitions, decreased 1.9%. Drugs of abuse testing volume, which is sensitive to hiring trends, declined 25.0% and cut clinical testing volume by 1.7%. The cost of services dipped 0.5% to $1.05 billion and selling, general, and administrative costs inched down 2.5% to $424.30 million.

DGX's ClariSure Postnatal Molecular test received clinical laboratory approval from New York State. The company announced an end-user license agreement (EULA) with Nanogen, a developer of molecular and rapid diagnostic products, for MGB Probe technology in human in vitro diagnostic testing. Quest Diagnostics entered into a non-exclusive licensing agreement for biomarker mGSTP1 with Epigenomics AG, a cancer molecular diagnostics company.

The company raised its FY09 estimated earnings per diluted share from continuing operations to range between $3.65 and $3.75 from its previous guidance of $3.50 to $3.70. The company expects revenue to grow approximately 3.0% and operating income to be approximately 18.0% of revenue.

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