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Hologic's (HOLX) Surgical Business Set to Propel Q3 Earnings
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Hologic, Inc.’s (HOLX - Free Report) GYN Surgical performance is expected to be driven by a robust international business and sales of MyoSure and the related Fluent system. The Breast Health division is likely to have slowly moved beyond the difficult prior-year comparisons, helped by the robust demand for its offerings and visible gantry orders. In addition, the molecular business may have driven the Diagnostics division’s performance led by its growth drivers.
We anticipate the company’s fiscal 2024 third-quarter financial results, slated to be released on Jul 29 after the closing bell, to reflect these aspects.
In the meantime, you can also check out why the company could be a wise investment choice before the earnings release.
GYN Surgical
Hologic has grown its initial two-product-focused Surgical business to a broader portfolio, including new product lines from acquisitions. In the third quarter of fiscal 2024, revenues are likely to have been driven by strong sales of MyoSure and Fluent Fluid Management products. Additionally, contributions from the newer laparoscopic products, which Hologic acquired through Boulder and Acessa, are also likely to have helped boost growth.
The International Surgical business may have delivered a robust performance in the to-be-reported quarter. This is primarily due to the company’s ongoing efforts to capture more markets as well as its direct sales strategy in the Nordic region of Europe.
Also, in April 2024, Hologic secured an Innovative Technology contract from Vizient for its CoolSeal advanced energy portfolio and JustRight 5 mm stapler. The recognition by Vizient’s team of experts underscores the potential of these technologies to enhance clinical care, patient safety and healthcare worker safety and improve the business operations of healthcare organizations. We expect this development to have a positive impact on Hologic’s revenues in the fiscal third quarter.
Meanwhile, sales of NovaSure devices are likely to have slowed down as the benefit of higher ASP (average selling price) contribution from the launch of its V5 extension in fiscal 2023 is no longer in effect.
Our model forecast for GYN Surgical revenues indicates a 7.1% year-over-year increase in the to-be-reported quarter.
Breast Health
The division continued to navigate some challenging prior-year comparisons throughout the months of fiscal 2024. Nonetheless, the worldwide gantry and service businesses put up impressive performances in the second quarter and can potentially exceed the gantry deliveries of fiscal 2023.
During the last earnings call, management projected a steady performance in the Breast health franchise in the latter half of the year, driven by robust demand for products and services and clear visibility of the gantry orders. Such favorable developments are likely to have been reflected in the quarter under review.
We expect an increasing sales volume of Hologic’s 3D digital mammography systems, and related workstation and workflow products to benefit. Across interventional breast solutions products, sales of Brevera, ATEC needles and Affirm Prone biopsy systems are likely to have been robust.
Furthermore, in April, Hologic made a strategic move by announcing an agreement to acquire Endo-Magnetics LTD — a company known for providing breast cancer surgery technologies. Following the close of the deal, Endo-Mag's portfolio of innovative breast surgery localization and lymphatic tracing products will enhance the company’s growing interventional breast business. This is also likely to have a positive impact on the fiscal third-quarter top line.
Going by our model, Hologic’s Breast Health business revenues are expected to increase by 3.4% year over year.
Diagnostics
In the third quarter of fiscal 2024, the U.S. Molecular Diagnostics growth is likely to have been fueled by the increased adoption of Aptima BV and CV/TV vaginitis assays on the Panther and strong contributions from the respiratory suite of assays on the Fusion system. Despite its primary focus in the U.S. markets, the BV and CV/TV tests are tracking to become the second-largest assay of the company globally due to their underlying strength. Also, Biotheranostics, serving as a pivotal growth pillar, may have favorably contributed as well.
The Cytology & Perinatal unit is expected to register higher instrument sales in the fiscal third quarter, particularly with the Genius Digital Diagnostics system and ThinPrep processors. Hologic’s Genius AI digital cytology system is likely to have seen broad adoption across several countries, positively impacting international Diagnostics performance. Earlier, in February 2024, the system became the first FDA-cleared digital cytology platform combining deep learning-based AI with advanced imaging technology to help more accurately detect pre-cancerous lesions and cervical cancer cells.
However, the business had registered unusually high sales in the third quarter of fiscal 2023 as customers largely stocked up inventory due to third-party shipping constraints. We assume the company may face challenges to match those numbers in the to-be-reported quarter. In addition, the declining trend of COVID-19 testing revenues may have limited the segment’s growth.
Going by our model, Diagnostics revenues are likely to have decreased by a modest 0.3% year over year in the third quarter of fiscal 2024.
Skeletal Health
Comparatively a smaller business, the division is likely to have registered a decrease in sales volume and ASP of both the Insight FD systems and Horizon DXA systems. Our model forecast indicates a 23.8% decline in Skeletal Health revenues in the third quarter of fiscal 2024.
Earnings Whispers
Per our proven model, stocks with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold), along with a positive Earnings ESP, have a higher chance of beating estimates. However, that is not the case here, as you can see below:
Earnings ESP: Hologic has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Here are some medical stocks worth considering, as these have the right combination of elements to post an earnings beat this time:
Hims & Hers Health (HIMS - Free Report) has an Earnings ESP of +19.28% and a Zacks Rank #1. The company is scheduled to release results for the second quarter of 2024 on Aug 5.
HIMS’ earnings surpassed estimates in three of the trailing four quarters and missed the same once, with the average surprise being 79.17%. The Zacks Consensus Estimate for the company’s second-quarter EPS is expected to surge 266.7% from the year-ago quarter figure.
HCA Healthcare (HCA - Free Report) has an Earnings ESP of +7.10% and a Zacks Rank #2. The company is slated to release results for the second quarter of 2024 on Jul 23.
HCA’s earnings surpassed estimates in three of the trailing four quarters, with the average surprise being 5.64%. The Zacks Consensus Estimate for HCA Healthcare’s second-quarter EPS is expected to jump15.9% from the year-ago quarter figure.
Penumbra (PEN - Free Report) has an Earnings ESP of +0.08% and a Zacks Rank #2. The company is scheduled to release results for the second quarter of 2024 on Jul 30.
The company’s earnings surpassed estimates in three of the trailing four quarters and missed in one, with the average surprise being 25.97%. The Zacks Consensus Estimate for PEN’s 2024 second-quarter EPS is expected to improve 30.2% from the year-ago reported figure.
Image: Bigstock
Hologic's (HOLX) Surgical Business Set to Propel Q3 Earnings
Hologic, Inc.’s (HOLX - Free Report) GYN Surgical performance is expected to be driven by a robust international business and sales of MyoSure and the related Fluent system. The Breast Health division is likely to have slowly moved beyond the difficult prior-year comparisons, helped by the robust demand for its offerings and visible gantry orders. In addition, the molecular business may have driven the Diagnostics division’s performance led by its growth drivers.
We anticipate the company’s fiscal 2024 third-quarter financial results, slated to be released on Jul 29 after the closing bell, to reflect these aspects.
In the meantime, you can also check out why the company could be a wise investment choice before the earnings release.
GYN Surgical
Hologic has grown its initial two-product-focused Surgical business to a broader portfolio, including new product lines from acquisitions. In the third quarter of fiscal 2024, revenues are likely to have been driven by strong sales of MyoSure and Fluent Fluid Management products. Additionally, contributions from the newer laparoscopic products, which Hologic acquired through Boulder and Acessa, are also likely to have helped boost growth.
The International Surgical business may have delivered a robust performance in the to-be-reported quarter. This is primarily due to the company’s ongoing efforts to capture more markets as well as its direct sales strategy in the Nordic region of Europe.
Also, in April 2024, Hologic secured an Innovative Technology contract from Vizient for its CoolSeal advanced energy portfolio and JustRight 5 mm stapler. The recognition by Vizient’s team of experts underscores the potential of these technologies to enhance clinical care, patient safety and healthcare worker safety and improve the business operations of healthcare organizations. We expect this development to have a positive impact on Hologic’s revenues in the fiscal third quarter.
Hologic, Inc. Price and EPS Surprise
Hologic, Inc. price-eps-surprise | Hologic, Inc. Quote
Meanwhile, sales of NovaSure devices are likely to have slowed down as the benefit of higher ASP (average selling price) contribution from the launch of its V5 extension in fiscal 2023 is no longer in effect.
Our model forecast for GYN Surgical revenues indicates a 7.1% year-over-year increase in the to-be-reported quarter.
Breast Health
The division continued to navigate some challenging prior-year comparisons throughout the months of fiscal 2024. Nonetheless, the worldwide gantry and service businesses put up impressive performances in the second quarter and can potentially exceed the gantry deliveries of fiscal 2023.
During the last earnings call, management projected a steady performance in the Breast health franchise in the latter half of the year, driven by robust demand for products and services and clear visibility of the gantry orders. Such favorable developments are likely to have been reflected in the quarter under review.
We expect an increasing sales volume of Hologic’s 3D digital mammography systems, and related workstation and workflow products to benefit. Across interventional breast solutions products, sales of Brevera, ATEC needles and Affirm Prone biopsy systems are likely to have been robust.
Furthermore, in April, Hologic made a strategic move by announcing an agreement to acquire Endo-Magnetics LTD — a company known for providing breast cancer surgery technologies. Following the close of the deal, Endo-Mag's portfolio of innovative breast surgery localization and lymphatic tracing products will enhance the company’s growing interventional breast business. This is also likely to have a positive impact on the fiscal third-quarter top line.
Going by our model, Hologic’s Breast Health business revenues are expected to increase by 3.4% year over year.
Diagnostics
In the third quarter of fiscal 2024, the U.S. Molecular Diagnostics growth is likely to have been fueled by the increased adoption of Aptima BV and CV/TV vaginitis assays on the Panther and strong contributions from the respiratory suite of assays on the Fusion system. Despite its primary focus in the U.S. markets, the BV and CV/TV tests are tracking to become the second-largest assay of the company globally due to their underlying strength. Also, Biotheranostics, serving as a pivotal growth pillar, may have favorably contributed as well.
The Cytology & Perinatal unit is expected to register higher instrument sales in the fiscal third quarter, particularly with the Genius Digital Diagnostics system and ThinPrep processors. Hologic’s Genius AI digital cytology system is likely to have seen broad adoption across several countries, positively impacting international Diagnostics performance. Earlier, in February 2024, the system became the first FDA-cleared digital cytology platform combining deep learning-based AI with advanced imaging technology to help more accurately detect pre-cancerous lesions and cervical cancer cells.
However, the business had registered unusually high sales in the third quarter of fiscal 2023 as customers largely stocked up inventory due to third-party shipping constraints. We assume the company may face challenges to match those numbers in the to-be-reported quarter. In addition, the declining trend of COVID-19 testing revenues may have limited the segment’s growth.
Going by our model, Diagnostics revenues are likely to have decreased by a modest 0.3% year over year in the third quarter of fiscal 2024.
Skeletal Health
Comparatively a smaller business, the division is likely to have registered a decrease in sales volume and ASP of both the Insight FD systems and Horizon DXA systems. Our model forecast indicates a 23.8% decline in Skeletal Health revenues in the third quarter of fiscal 2024.
Earnings Whispers
Per our proven model, stocks with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold), along with a positive Earnings ESP, have a higher chance of beating estimates. However, that is not the case here, as you can see below:
Earnings ESP: Hologic has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Hologic currently carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Stocks Worth a Look
Here are some medical stocks worth considering, as these have the right combination of elements to post an earnings beat this time:
Hims & Hers Health (HIMS - Free Report) has an Earnings ESP of +19.28% and a Zacks Rank #1. The company is scheduled to release results for the second quarter of 2024 on Aug 5.
HIMS’ earnings surpassed estimates in three of the trailing four quarters and missed the same once, with the average surprise being 79.17%. The Zacks Consensus Estimate for the company’s second-quarter EPS is expected to surge 266.7% from the year-ago quarter figure.
HCA Healthcare (HCA - Free Report) has an Earnings ESP of +7.10% and a Zacks Rank #2. The company is slated to release results for the second quarter of 2024 on Jul 23.
HCA’s earnings surpassed estimates in three of the trailing four quarters, with the average surprise being 5.64%. The Zacks Consensus Estimate for HCA Healthcare’s second-quarter EPS is expected to jump15.9% from the year-ago quarter figure.
Penumbra (PEN - Free Report) has an Earnings ESP of +0.08% and a Zacks Rank #2. The company is scheduled to release results for the second quarter of 2024 on Jul 30.
The company’s earnings surpassed estimates in three of the trailing four quarters and missed in one, with the average surprise being 25.97%. The Zacks Consensus Estimate for PEN’s 2024 second-quarter EPS is expected to improve 30.2% from the year-ago reported figure.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.