(Reuters) -Laboratory operator Quest Diagnostics raised its full-year forecast for profit and revenue on Tuesday, banking on robust demand for its diagnostic tests, after posting strong results for the third quarter.
Shares of the New Jersey-based company were up 2.7% in premarket trading.
Quest expects 2025 adjusted profit between $9.76 and $9.84 per share versus its previous range of $9.63 to $9.83 per share.
It sees annual revenue at $10.96 billion to $11 billion, above its prior view of $10.80 billion to $10.92 billion.
While healthy demand for non-urgent surgeries, particularly among older Americans, has driven demand for diagnostic tests, Quest and peer Labcorp have also benefited from deals to manage hospital labs as they seek market share gains.
Quest’s revenue for the third quarter rose 13.1% to $2.82 billion, beating analysts’ average estimate of $2.74 billion, according to data compiled by LSEG.
“Growth reflected sustained momentum in core testing, ongoing strength in advanced diagnostics, lack of weather issues, and incremental M&A contribution,” said Evercore ISI analyst Elizabeth Anderson.
The company said it expects new legislation, including the Trump administration’s One Big Beautiful Bill Act, and the scheduled expiration of enhanced Affordable Care Act tax credits at the end of 2025, to not have a material impact on revenue in 2025 and 2026.
The changes could trim consolidated revenue by up to 50-60 basis points by 2028 compared with 2025, mainly due to lower Obamacare or ACA exchange insurance plan revenue.
The OBBBA imposes stricter eligibility verification and ends automatic re-enrollment for ACA customers, while the lapse of enhanced tax credits will raise premiums for millions of enrollees.
Piper Sandler’s David Westenberg said “we see national labs as one of the safest, most stable investments.”
On an adjusted basis, Quest posted a profit of $2.60 per share for the quarter ended September 30, above analysts’ average estimate of $2.50.
(Reporting by Puyaan Singh in Bengaluru; Editing by Shailesh Kuber)
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