EARNINGS PER SHARE

9 Months Ended

Sep. 30, 2011

3. EARNINGS PER SHARE

The computation of basic and diluted earnings per common share was as follows (in thousands, except per share data):


	Three Months Ended September 30,		Nine Months Ended September 30,
	2011	2010	2011	2010
Amounts attributable to Quest Diagnostics' stockholders:
Income from continuing operations	$ 172,098	$ 198,435	$ 282,261	$ 555,816
Loss from discontinued operations, net of taxes	(250)	(360)	(1,131)	(678)
Net income attributable to Quest Diagnostics' common stockholders	$ 171,848	$ 198,075	$ 281,130	$ 555,138

Income from continuing operations	$ 172,098	$ 198,435	$ 282,261	$ 555,816
Less: Earnings allocated to participating securities	967	957	1,934	2,545
Earnings available to Quest Diagnostics' common stockholders – basic and diluted	$ 171,131	$ 197,478	$ 280,327	$ 553,271

Weighted average common shares outstanding – basic	157,816	173,229	158,971	177,456

Effect of dilutive securities:
Stock options and performance share units	1,186	1,086	1,548	1,697
Weighted average common shares outstanding – diluted	159,002	174,315	160,519	179,153

Earnings per share attributable to Quest Diagnostics' common stockholders – basic:
Income from continuing operations	$ 1.08	$ 1.14	$ 1.76	$ 3.12
Loss from discontinued operations	-	-	(0.01)	-
Net income	$ 1.08	$ 1.14	$ 1.75	$ 3.12

Earnings per share attributable to Quest Diagnostics' common stockholders – diluted:
Income from continuing operations	$ 1.08	$ 1.13	$ 1.75	$ 3.09
Loss from discontinued operations	(0.01)	-	(0.01)	-
Net income	$ 1.07	$ 1.13	$ 1.74	$ 3.09

Stock options and performance share units of 2.3 million shares and 2.2 million shares for the three and nine months ended September 30, 2011, respectively, were not included due to their antidilutive effect.

Stock options and performance share units of 3.3 million shares and 3.0 million shares for the three and nine months ended September 30, 2010, respectively, were not included due to their antidilutive effect.