Quest Diagnostics faces risks from pending and future government investigations, lawsuits, and private actions. Billing, reimbursement, and revenue recognition complexities are also noted. Changing customer, payer, and supplier relationships, as well as potential acquisition integration issues, are mentioned. The company's exposure to interest rate changes is addressed through derivative instruments, but a 10% increase in rates could reduce debt value. Equity investments in private companies are subject to valuation uncertainties. General and professional liability claims, including those related to pap smear screening in Ireland, pose potential financial losses.
Financial Upside
The company's Invigorate program aims for 3% annual cost savings and productivity improvements. Recent acquisitions, including LifeLabs, Allina, and others, are expected to contribute to revenue growth. A $1.85 billion senior notes offering provides funding for acquisitions and general corporate purposes. The company has $1.3 billion in borrowing capacity, and believes its cash and operations will fund future needs. The company is pursuing growth opportunities, including additional acquisitions.
