--Quest names Philips executive as new CEO
--Stephen Rusckowski's appointment effective May 1
--Change could mark new course for Quest
(Adds analyst comments, updated share price, other information, in the second, fourth and fifth paragraphs.)
By Anjali Athavaley and Nathalie Tadena
Of DOW JONES NEWSWIRES
NEW YORK -(Dow Jones)- Quest Diagnostics Inc. (DGX) named Royal Philips Electronics NV (PHG, PHIA.AE) executive Stephen Rusckowski as its new president and chief executive, ending a six-month search for a successor to current CEO Surya Mohapatra.
Rusckowski's appointment is effective May 1, and he will join the company's board. Rusckowski has served as CEO of Philips Healthcare, Royal Philips' largest unit, since 2006. During his tenure, revenue at the unit increased to about EUR9 billion and 39% of Royal Philips' total revenue in 2011 from about EUR6B and 21% of revenue in 2005.
The management change could mark a new course for the company. Some decisions Quest made under Mohapatra--such as the acquisition of diagnostics company AmeriPath Inc. and an expansion into India--have been criticized by analysts.
"We knew this was going to get announced any day," said Art Henderson, health-care analyst at Jefferies & Co. "The investment community wasn't sure who the candidate would be. Who they have chosen is obviously somebody who was pretty instrumental in the growth at Philips."
Quest shares rose 1% to $60.20 in after-hours trading Wednesday. The stock is up 2.6% this year.
Quest, the largest diagnostic-testing company in the U.S. by revenue, had been hurt by a decline in doctor-office visits as consumers have reined in their health-care spending since the recession. Last year, the company unveiled a restructuring initiative to reduce its costs by $500 million over the next three years to help it meet profit targets. In October, the company initiated a search for a replacement for Mohapatra, who held the titles of chairman, president and CEO.
Quest also appointed lead director Daniel C. Stanzione as its new non-executive chairman.
"Steve Rusckowski is uniquely qualified to be chief executive officer of Quest Diagnostics," Stanzione said. "He has built an enviable track record in health care by successfully driving growth, both organically and through disciplined, effective acquisitions. His emphasis on operational excellence has enabled him to deliver consistently impressive results."
In January, Quest reported its fourth-quarter earnings rose 14% as the company saw higher testing revenue and improved margins.
-By Anjali Athavaley and Nathalie Tadena, Dow Jones Newswires; 212-416-4912; firstname.lastname@example.org
(END) Dow Jones Newswires
April 11, 2012 17:54 ET (21:54 GMT)
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