How is the new Chief Executive moron doin'?

Ding ding ding. He and Surya may have had their strong points (though I stuggle to find one for Surya) but actually running a growing business was not a strength for either of them. Buying lab after lab is a nice way to give the appearance of growth, but failing to actually build that collection of labs into a business is how the compamny ended up in this mess.

 

I couldn't agree more!!!

 

The only person responsible for the current mess is the one in charge now. Not the previous two heads. Get over it-Obama.

 

You’re off the mark. The person(s) responsible for the current mess is ultimately the Board. If you can’t identify the problem then you can never fix it.

 

You mean the Board that was hand-picked by Surya?

 

More of the Moron's doing-

Jan. 23, 2014, 2:50 p.m. EST
Fitch Places Quest Diagnostics' Ratings on Rating Watch Negative

CHICAGO, Jan 23, 2014 (BUSINESS WIRE) -- Fitch Ratings has placed Quest Diagnostics, Inc. (Quest) ratings, including the 'BBB+' Issuer Default Rating (IDR), on Rating Watch Negative. The rating action applies to approximately $3.37 billion of outstanding debt.

See a full list of ratings placed on Rating Watch Negative below.

KEY RATING DRIVERS

Acquisition of Solsats Will Increase Leverage

The Rating Watch Negative reflects an expectation of higher leverage (total debt to EBITDA) as the result of the funding of the acquisition of of Solstas Lab Partners Group (Solstas) for $570 million. Fitch does see the acquisition of the commercial lab operator as strategically appropriate, given the acquisition will broaden Quest's reach in the Southeast region where Solstas operates in nine states, and add around 5% in annualized revenues.

However, incremental debt for the purchase would stress leverage that is already high for the 'BBB+' rating. Debt leverage increased to 2.58x for the latest 12-month (LTM) period ending Sept. 30, 2013 from 2.16x in 2012, as operating cost savings have not entirely offset pressured revenues while the debt load remained steady. Fitch anticipates Quest would need a combination of operational improvement and a reduced debt load to return to its leverage (total debt to EBITDA) target of 2.0 times (x) to 2.25x, a level Fitch considers to be consistent with the 'BBB+' rating.

Negative Trends Compress Margins

Continued negative health care utilization trends and government reimbursement constraint have dampened Quest's operating performance during 2013. Revenues in the first nine months of 2013 dropped by 3.9% versus the same period in 2012, driven by a 4.3% decrease in diagnostic testing revenues comprising a 3.8% drop in revenue per requisition and a 0.5% fall in volume. Cost savings from the $600 million Invigorate program has not kept pace with the revenue pressure leading to EBITDA margin compressing to 18.4% for the LTM ending Sept. 30, 2013 from 20.8% in 2012. Fitch is cautious about operational improvement this year, but some relief may stem from greater throughput arising from higher volumes associated with increased patient access and utilization following the initiation of Medicaid expansion and the state health insurance exchanges starting this year under the Affordable Care Act.

Maturities Manageable, Ample Liquidity

While a large portion of Quest's long-term debt (totaling $1.4 billion) is due in 2014 to 2017, Fitch believes the maturities are well-laddered and manageable. The maturing debt provides an option to wind down debt leverage, especially in light of yesterday's Solstas acquisition announcement. Currently, Quest has ample liquidity provided by operating cash flow generation of more than $800 million annually and a cash balance of $158 million at Sept. 30, 2013. External sources of liquidity are a $525 million receivables program and a $750 million revolving credit facility due September 2016.

Shareholder Returns Jump

Quest's management is committed to returning the majority of free cash flow to equity holders. Both dividends and share repurchases spiked in 2013 with a 76% increase to the dividend to $1.20 per share annually and more than $990 million of common share buybacks for the first nine months of the year. Asset sales of nearly $770 million during 2013 comprising the HemoCue business and ibrutinib intellectual property rights have partially funded the increased dividend and share repurchases. If Quest chooses to pull back on share repurchase activity following the purchase of Solstas and instead prioritize debt reduction as a use of cash flow, it would provide support for the ratings.

RATING SENSITIVITIES

Fitch will resolve the Rating Watch when there is more information about Quest's plans to fund the Solstas acquisition. A one-notch downgrade to 'BBB' is likely unless the company demonstrates a clear plan to reduce leverage to below 2.25x within 12-18 months following the close of the acquisition. Given the ongoing weak operating trends, characterized by weak growth in organic volumes and government reimbursement pressures, Fitch expects that reducing debt to this level will require the application of some cash to paydown debt.

Positive rating action is not likely over the ratings horizon in light of an anticipated increase in already higher-than-expected total debt leverage due to potential debt funding needed to complete the proposed acquisition of Solstas.

QUEST'S RATINGS

Fitch has placed the following ratings on Rating Watch Negative:

--Issuer Default Rating (IDR) of 'BBB+';

--Senior unsecured debt rating of 'BBB+';

--Bank loan rating of 'BBB+'.

 

You can fool some of the people some of the time but you can't fool Wall Street

 

"Check out the big brain on Brett ... you're a smart MFer!"

 

What?

 

Dude, a line from Pulp Fiction. Oh that's right, almost 20 years ago. You were probably still in diapers.

 

say "what" ONE MORE TIME....

 

wow... have you actually seen the movie, or just google the quote in between bites of your breakfas Big Kahuna burger?

 

To the posters on #191+192 … “When you scams get together, you’re worse than a sewing circle.”

 

More about the moron's achievements:

Quest Diagnostics has delivered negative earnings surprises in all of the last four quarters with an average miss of 5.73%.

From zacks.com

Wait for Friday's crash of Dgx-predicting <$40 soon

 

Having been in a Sr. Mgmt role at Quest they are and will continue to struggle with....

1.) No operational leaders with laboratory specific talent or experience. Sales can drive the business in (and historically have done a very commendable job), but how many times have your clients expectations been crushed because the specific B/U managing the work has failed? Maybe the courier service, the lab, client services...it all has to work together to do it right. By the non-stop head count reductions and expense cutting something, somewhere is going to be sacrificed. IF quality had a spot on the Wall Street spreadsheets maybe the leadership would pay attention.

2.) Preparation......its was always a Chinese fire drill (no ethnic slur intended) at Quest when a new challenge or problem surfaced and mainly because the focus is always on today...what can we cut today.....not on preparing for tomorrow. That lack of foresight has cost them millions of dollars.

3.) The Quest game plan is "integration"....create "mega" labs in certain regional strategic locations...sacrifice the local labs (and most of them are profitable) and the local presence, the local relationships eventually erode and give way to the "small guys" as competitors. Unload all the pathologist who have longstanding relationships that you can "sell" and back fill them with fresh new fellowship grads that will work for half the price. When they wake up and want more money...unload them and repeat step 1.

4.) ACO's- Quest lives and breathes "volume" and rev/req...and so does Wall Street. ACO's are based around outcomes, not volume of testing.....ACO's are "Volume to Value" based so as ACO's proliferate the available pool of testing is likely to decrease. ACO's are also local...managing local populations of insured. Item #3 removes that local presence and will likely limit Quests reach into an ACO........

And many more.....

 

Not to worry, we have a five point plan.

 

But,

There is an opportunity that only comes along only once in a while - if you chumps have gotten to the "Options" component of your compensation package.

The next set will be priced soon - at a low not seen in a decade. All the past in the money grants have been exercised (or you wish you had). This is the time that options do end up working out.

If you are good enough to be part of that, this is your happy hour. Your happy day (or year) will be when the stock had gotten back to its high. Which actually does happen from time to time.


That "former Sr. Mgmt" guy above did it.

Maybe not as well as others, though.

 

Any options of this stock even at today's price (multi-year low), is worthless. This crap is going down, with this leadership. New CEO and seni0r management needed for stock options to be worth anything-

 

Obviously such a concept does not inspire you.

You sure you're on the right team?

 

Far better to be "Chief Executive Moron" (oh, brother) than some moron who whines on message boards.

No wonder your wife cheats on you with black guys.