So, Quest Diagnostics Incorporated (DGX) had a pretty good start to the year. On Tuesday, the diagnostic testing giant reported first-quarter adjusted earnings of $2.50 per share. That beat what analysts were expecting, which was $2.35. Not a bad way to kick things off.
Sales came in at $2.895 billion, which is up 9.2% from the same time last year and also ahead of the consensus estimate of $2.827 billion. The company calls this "consolidated organic revenues," and that grew by 9%. Operating income jumped 15.5% to $399 million. On an adjusted basis, operating income was $447 million, giving them a margin of 15.4%, compared to 15.3% last year. So, they're making a bit more money on each dollar of revenue, which is always a good sign.
Where's All This Growth Coming From?
If you're wondering what's driving this, look at the volume. The total number of test requisitions increased by 10.9% compared to Q1 2025. The organic part of that—so, growth excluding acquisitions—was up 10.8%.
Here's the interesting bit: a big chunk of that organic volume growth, about 7 percentage points, came from two specific partnerships. One is with Fresenius Medical Care (FMS), the dialysis company, and the other is with Corewell Health, a major health system. These aren't small deals; they're moving the needle. If you take out the boost from those two relationships, organic volume growth was still a solid 3.8% for the quarter.
"During the first quarter, we grew revenues over 9%, almost entirely from organic revenue growth, on broad-based demand for our clinical innovations, expansion into new clinical areas, and collaborations with elite healthcare and consumer health organizations," said Jim Davis, the Chairman, CEO, and President.
He also pointed to the bottom line: "In addition, we grew adjusted diluted earnings per share by approximately 13%, supported by productivity gains from our deployment of automation and AI across our operations, both in and outside our labs." So, it's not just about doing more tests; it's about doing them more efficiently, and apparently, the robots and algorithms are helping.
Feeling Good Enough to Raise the Bar
When you have a quarter like this, you sometimes get to update your plans for the rest of the year. That's exactly what Quest did.
"Given the solid performance in the first quarter, we are raising our full-year revenue and EPS estimates," said CFO Sam Samad.
Here are the new numbers: For fiscal 2026, they now expect adjusted earnings per share to be in the range of $10.63 to $10.83. The old range was $10.50 to $10.70, and the consensus estimate was sitting at $10.55. So, the new guide is above both where they were and where the Street thought they'd be.
On the revenue side, they raised their outlook from $11.7 billion to $11.82 billion, up to a new range of $11.78 billion to $11.9 billion. The Wall Street estimate was $11.75 billion. Again, the new target is higher.
Investors seemed to like the news. Quest Diagnostics shares were up 5.17% at $206.46 at the time of publication on Tuesday.
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