Quest Diagnostics’ DGX first-quarter 2016 adjusted earnings per share (EPS) of $1.12 came in line with the Zacks Consensus Estimate and exceeded the year-ago number by 6.7%.Adjusted EPS in the reported quarter excludes charges related to early retirement of certain debt as well as restructuring and integration costs. Reported EPS in the first quarter came in at 70 cents, representing a year-over-year surge of 66.7%. Quest Diagnostics Inc. (DGX) EPS BNRI & Surprise Percent - Last 5 Quarters | FindTheCompanyRevenues for the first quarter went up 1.3% year over year to $1.86 billion, coming ahead of the Zacks Consensus Estimate of $1.83 billion. However, excluding the clinical trials’ testing business contribution to the joint venture from the year-ago quarter’s revenue, sales increased 3.6% year over year.Volume (measured by the number of requisitions) increased 2.6% year over year. Revenue per requisition inched up 1.1% from the year-ago quarter. Diagnostic information services revenues in the quarter grew 3.8% on a year-over-year basis.Among operating costs, cost of services during the reported quarter was $1.14 billion, down 1.6% year over year. Gross margin came in at 38.6%, up 184 basis points (bps) year over year.Selling, general and administrative (SG&A) expenses increased 5.5% to $442 million in the reported quarter. Adjusted operating margin showed an improvement of 89 bps to 14.9%, with a 7.8% rise in adjusted operating income to $277 million.Quest Diagnostics exited the first quarter of 2016 with cash and cash equivalents of $128 million, down 3.8% from $133 million at the end of fiscal 2015. Net cash provided by operating activities for the quarter was $143 million compared with $52 million in the comparable year-ago period.Through the first quarter, the company repurchased 1.7 million shares for $115 million and was left with $857 million of authorization under the approved share repurchase plan.OutlookQuest Diagnostics reiterated its 2016 guidance. The company still expects full-year revenues in the range of $7.52–$7.59 billion, reflecting annualized growth of 1.5%–2.5%. The current Zacks Consensus Estimate for revenues is pegged at $7.54 billion, within but closer to the lower end of the guidance range.In addition, the company’s 2016 adjusted EPS expectation (excluding amortization expense) remains in the range of $5.02–$5.17 (unchanged). The Zacks Consensus Estimate of $5.08 remains within the guided range.Operating cash flow for 2016 is expected to reach $1 billion (unchanged). The current estimate for capital expenditure has also been reiterated in the range of $250–$300 million.Our TakeQuest Diagnostics duly met our earnings expectation for the first quarter of 2016 while revenues exceeded the mark. The company is currently refocusing on its core diagnostic information services business and working on delivering disciplined capital deployment. We are also highly optimistic about the company’s focus on continued execution of its five-point strategy. According to Quest Diagnostics, its planned divestiture of remaining products assets is part of this broader strategy. In addition, several new relationships with hospitals and integrated delivery networks were other growth drivers.However, over the past several quarters, the overall soft industry trends, leading to a low volume environment, have acted as a dampener for the company.Zacks RankThe stock presently carries a Zacks Rank #3 (Hold). Some of the better-ranked players in the broader medical sector are Almost Family Inc. AFAM, Amedisys Inc. AMED and Boston Scientific Corporation BSX – all with a Zacks Rank #2 (Buy).Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report BOSTON SCIENTIF (BSX): Free Stock Analysis Report AMEDISYS INC (AMED): Free Stock Analysis Report QUEST DIAGNOSTC (DGX): Free Stock Analysis Report ALMOST FAMILY (AFAM): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research