2010 Financial Performance
For the full year:
- Revenues decreased 1.2% to $7.4 billion;
- We grew earnings per share 5% to $4.06; and
- We generated $1.1 billion in cash from operations.
We continue to see strong demand for esoteric and gene-based testing. These tests, together with anatomic pathology, continue to account for 36% of consolidated revenues, up from 19% in 2000.
Our anatomic pathology revenues continued to be negatively impacted by the trend toward in-sourcing of testing by certain physician practice specialties. We have taken steps to strengthen our offering as well as educate legislators and regulators about the real risk of overutilization when physicians refer testing to labs in which they have a financial interest.
Accelerating growth
We are focused on a five-point plan to drive improvement in our performance and take advantage of growth opportunities. The elements of the plan are to:
- Enhance sales effectiveness;
- Promote innovative tests and technologies;
- Assist Health Plans to reduce high cost out-of-network utilization;
- Increase operating efficiency; and
- Deploy our cash to drive growth and shareholder value.
I’d like to update you briefly on each element.
Enhance sales effectiveness
Over the course of much of the last year and a half, we invested in our sales organization to respond to a changing marketplace. We added sales positions and substantially completed our sales force expansion by the end of 2010. In addition, we have expanded our specialty sales capability. With these enhancements, we entered 2011 well positioned to capitalize on market opportunities in various subspecialties.
Promote innovative tests and technologies
We are focused on developing and promoting important, new gene-based and esoteric tests, which represent the fastest-growing part of our business.
In 2010, gene-based and esoteric testing revenues grew 4.5%. Much of the growth has been driven by Vitamin D testing, as well as testing for blood cancers, particularly our Leumeta™ family of blood tests.
We made good progress building our innovation pipeline in our key focus areas of cancer, infectious disease and cardiovascular disease.
In cancer diagnostics, we introduced ColoVantage™, the first blood test for the detection of colorectal cancer. We also continue to see growing interest in OVA1™, the first blood test cleared by the FDA to help detect ovarian cancer before surgery.
In infectious disease, our recently introduced SureSwab™ real-time PCR test for gynecologic infections was well received. In addition, our Focus Diagnostics unit continued to enhance and expand its Simplexa™ platform with new tests for influenza and a range of other infectious diseases.