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Hologic, Inc. (HOLX - Free Report) reported adjusted earnings per share (EPS) of $1.06 in the third quarter of fiscal 2024, up 14% year over year. The bottom line surpassed the Zacks Consensus Estimate by 3.9%.
The adjustments include charges and benefits related to the amortization of acquired intangible assets, restructuring and integration/consolidation costs, product line discontinuation and many others.
The company’s GAAP EPS was 82 cents in the quarter compared to the year-ago quarter’s loss of 16 cents.
Revenues in Detail
Revenues totaled $1.01 billion in the said quarter, up 2.7% year over year (up 3.1% at the constant exchange rate or CER). The metric surpassed the Zacks Consensus Estimate by 1.1%.
Geographical Revenue Analysis
In the fiscal third quarter, U.S. revenues totaled $765.3 million, an increase of 2%. This topped our model’s projection of $752.4 million for this region.
International revenues amounted to $246.1 million, up 5.1% year over year and up 6.4% at CER. Our model’s projection was $247.8 million.
Revenues in the Diagnostics segment increased 0.3% year over year (up 0.7% at CER) to $440.8 million in the quarter under review. Excluding COVID-19 revenues, Diagnostics revenues increased 5.5% on a reported basis. This compares with our model’s segmental projection of $438.5 million.
Within the division, Cytology & Perinatal revenues of $122.2 million were down 2.9% at CER. This compares with our model’s segmental projection of $109.8 million.
Molecular Diagnostics revenues of $310.7 million increased 3.1% at CER. Blood Screening revenues of $7.9 million fell 26.2% year over year at CER. Our model projected $321.4 million and $7.3 million for Molecular Diagnostics and Blood Screening, respectively, for the fiscal third quarter.
Revenues in the Breast Health segment increased 6.9% from the year-ago period’s (up 7.1% at CER) levels to $385 million, primarily driven by the Breast Imaging business, which posted solid domestic and international results.
Our model projected revenues of $372.5 million for this segment. Excluding SSI, Breast Health revenues increased 7.9%, or 8.2%, at constant currency.
Revenues in the GYN Surgical business rose 5.9% year over year (up 6.2% at CER) to $166.6 million, primarily driven by the solid sales of MyoSure and Fluent Fluid Management. Our model projected revenues of $168.5 million in this segment.
Revenues at Skeletal Health declined 29.9% year over year (down 29.7% at CER) to $19 million. Our model projected revenues of $20.6 million for this segment.
Operational Update
In the fiscal third quarter, the company-provided adjusted gross margin increased by 30 basis points (bps) to 61.1%, despite COVID-19 assay revenue declines being a headwind consistently.
The company’s adjusted operating margin was 31.2%, an expansion of 230 bps, primarily due totop-line growth, expanding gross margins and lower operating expenses.
Financial Update
Hologic ended the third quarter of fiscal 2024 with cash and cash equivalents of $2.44 billion compared with $2.18 billion in the second quarter of 2024.
Total long-term debt (including the current portion) was $2.54 billion, slightly down from $2.55 billion in the second quarter of fiscal 2024.
Net cash provided by operating activities at the end of the fiscal third quarter was $918.2 million compared with $792.5 million a year ago.
Guidance
Hologic provided an updated guidance for fiscal 2024 and initiated an outlook for the fourth quarter.
For fiscal 2024, the company projects revenues in the band of $4.012-$4.027 billion (previous guidance was $4.000-$4.050 billion). This indicates year-over-year growth in the range of (0.4%)-(0.1%) on a reported basis, (0.5%)-(0.1%) at CER and 5.2%-5.6% organically. The Zacks Consensus Estimate for fiscal 2024 revenues is pegged at $4.04 billion.
Adjusted EPS for fiscal 2024 is estimated in the band of $4.04-$4.11 (previously $4.02-$4.12), with projected growth of 2%-3.8% year over year. The Zacks Consensus Estimate for the fiscal 2024 EPS is pegged at $4.08.
For the fourth quarter of fiscal 2024, the company projects revenues between $970 million and $985 million, which suggests year-over-year growth in the range of 2.6%-4.2% on a reported basis, 2.9%-4.5% at CER and 5%-6.6% organically. The Zacks Consensus Estimate for fourth-quarter fiscal 2024 revenues is pegged at $1.00 billion.
Adjusted EPS for the fourth quarter is estimated between 97 cents and $1.04, which suggests an increase of 9%-16.9% year over year. The Zacks Consensus Estimate for the metric is pegged at $1.05.
Our Take
Hologic topped both earnings and revenue forecasts in the third quarter of fiscal 2024. The performance underscores the durable strength across the company’s broad portfolio, with Diagnostics (ex-COVID-19), Breast Health and Surgical franchises meeting or exceeding its expectations. Breast Health performance was driven largely by increased gantry shipments, while the robust Service revenue growth also continues to contribute meaningfully.
The Laparoscopy business in the Surgical arm also grew significantly. Additionally, the expansion of margins in the quarter is encouraging. Meanwhile, the Skeletal business revenues were affected by lower Horizon DXA shipments, resulting from a temporary stop ship related to a non-conformance issue.
Zacks Rank and Other Key Picks
Hologic currently has a Zacks Rank #2 (Buy).
Some other top-ranked stocks from the broader medical space are Intuitive Surgical (ISRG - Free Report) , Abbott Laboratories, Inc. (ABT - Free Report) and Quest Diagnostics (DGX - Free Report) .
Intuitive Surgical reported a third-quarter 2024 adjusted EPS of $1.78, which beat the Zacks Consensus Estimate by 16.3%. Revenues of $2.01 billion topped the consensus estimate by 2%. ISRG currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Intuitive Surgical has an estimated long-term earnings growth rate of 16.1% in 2024 compared with the industry’s 14.1%. The company’s earnings surpassed estimates in each of the trailing four quarters, the average being 8.97%.
Abbott, carrying a Zacks Rank #2, reported third-quarter 2024 earnings of $1.14, which surpassed the Zacks Consensus Estimate by 3.6%. Revenues of $10.38 billion topped the Zacks Consensus Estimate by 0.3%.
ABT has an estimated earnings growth rate of 10.1% for 2025 compared with the S&P 500’s 9.3%. The company surpassed earnings estimates in each of the trailing four quarters, the average being 2.34%.
Quest Diagnostics, carrying a Zacks Rank #2, reported a third-quarter adjusted EPS of $2.35, which surpassed the Zacks Consensus Estimate by 1.7%. Revenues of $2.40 billion exceeded the Zacks Consensus Estimate by 0.5%.
DGX’s historical five-year earnings growth rate of 7.4% compared favorably with the industry’s 4.2%. The company surpassed earnings estimates in each of the trailing four quarters, the average being 3.31%.
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Hologic (HOLX) Q3 Earnings Surpass Estimates, Margins Rise
Hologic, Inc. (HOLX - Free Report) reported adjusted earnings per share (EPS) of $1.06 in the third quarter of fiscal 2024, up 14% year over year. The bottom line surpassed the Zacks Consensus Estimate by 3.9%.
The adjustments include charges and benefits related to the amortization of acquired intangible assets, restructuring and integration/consolidation costs, product line discontinuation and many others.
The company’s GAAP EPS was 82 cents in the quarter compared to the year-ago quarter’s loss of 16 cents.
Revenues in Detail
Revenues totaled $1.01 billion in the said quarter, up 2.7% year over year (up 3.1% at the constant exchange rate or CER). The metric surpassed the Zacks Consensus Estimate by 1.1%.
Geographical Revenue Analysis
In the fiscal third quarter, U.S. revenues totaled $765.3 million, an increase of 2%. This topped our model’s projection of $752.4 million for this region.
International revenues amounted to $246.1 million, up 5.1% year over year and up 6.4% at CER. Our model’s projection was $247.8 million.
Hologic, Inc. Price, Consensus and EPS Surprise
Hologic, Inc. price-consensus-eps-surprise-chart | Hologic, Inc. Quote
Segments in Detail
Revenues in the Diagnostics segment increased 0.3% year over year (up 0.7% at CER) to $440.8 million in the quarter under review. Excluding COVID-19 revenues, Diagnostics revenues increased 5.5% on a reported basis. This compares with our model’s segmental projection of $438.5 million.
Within the division, Cytology & Perinatal revenues of $122.2 million were down 2.9% at CER. This compares with our model’s segmental projection of $109.8 million.
Molecular Diagnostics revenues of $310.7 million increased 3.1% at CER. Blood Screening revenues of $7.9 million fell 26.2% year over year at CER. Our model projected $321.4 million and $7.3 million for Molecular Diagnostics and Blood Screening, respectively, for the fiscal third quarter.
Revenues in the Breast Health segment increased 6.9% from the year-ago period’s (up 7.1% at CER) levels to $385 million, primarily driven by the Breast Imaging business, which posted solid domestic and international results.
Our model projected revenues of $372.5 million for this segment. Excluding SSI, Breast Health revenues increased 7.9%, or 8.2%, at constant currency.
Revenues in the GYN Surgical business rose 5.9% year over year (up 6.2% at CER) to $166.6 million, primarily driven by the solid sales of MyoSure and Fluent Fluid Management. Our model projected revenues of $168.5 million in this segment.
Revenues at Skeletal Health declined 29.9% year over year (down 29.7% at CER) to $19 million. Our model projected revenues of $20.6 million for this segment.
Operational Update
In the fiscal third quarter, the company-provided adjusted gross margin increased by 30 basis points (bps) to 61.1%, despite COVID-19 assay revenue declines being a headwind consistently.
The company’s adjusted operating margin was 31.2%, an expansion of 230 bps, primarily due totop-line growth, expanding gross margins and lower operating expenses.
Financial Update
Hologic ended the third quarter of fiscal 2024 with cash and cash equivalents of $2.44 billion compared with $2.18 billion in the second quarter of 2024.
Total long-term debt (including the current portion) was $2.54 billion, slightly down from $2.55 billion in the second quarter of fiscal 2024.
Net cash provided by operating activities at the end of the fiscal third quarter was $918.2 million compared with $792.5 million a year ago.
Guidance
Hologic provided an updated guidance for fiscal 2024 and initiated an outlook for the fourth quarter.
For fiscal 2024, the company projects revenues in the band of $4.012-$4.027 billion (previous guidance was $4.000-$4.050 billion). This indicates year-over-year growth in the range of (0.4%)-(0.1%) on a reported basis, (0.5%)-(0.1%) at CER and 5.2%-5.6% organically. The Zacks Consensus Estimate for fiscal 2024 revenues is pegged at $4.04 billion.
Adjusted EPS for fiscal 2024 is estimated in the band of $4.04-$4.11 (previously $4.02-$4.12), with projected growth of 2%-3.8% year over year. The Zacks Consensus Estimate for the fiscal 2024 EPS is pegged at $4.08.
For the fourth quarter of fiscal 2024, the company projects revenues between $970 million and $985 million, which suggests year-over-year growth in the range of 2.6%-4.2% on a reported basis, 2.9%-4.5% at CER and 5%-6.6% organically. The Zacks Consensus Estimate for fourth-quarter fiscal 2024 revenues is pegged at $1.00 billion.
Adjusted EPS for the fourth quarter is estimated between 97 cents and $1.04, which suggests an increase of 9%-16.9% year over year. The Zacks Consensus Estimate for the metric is pegged at $1.05.
Our Take
Hologic topped both earnings and revenue forecasts in the third quarter of fiscal 2024. The performance underscores the durable strength across the company’s broad portfolio, with Diagnostics (ex-COVID-19), Breast Health and Surgical franchises meeting or exceeding its expectations. Breast Health performance was driven largely by increased gantry shipments, while the robust Service revenue growth also continues to contribute meaningfully.
The Laparoscopy business in the Surgical arm also grew significantly. Additionally, the expansion of margins in the quarter is encouraging. Meanwhile, the Skeletal business revenues were affected by lower Horizon DXA shipments, resulting from a temporary stop ship related to a non-conformance issue.
Zacks Rank and Other Key Picks
Hologic currently has a Zacks Rank #2 (Buy).
Some other top-ranked stocks from the broader medical space are Intuitive Surgical (ISRG - Free Report) , Abbott Laboratories, Inc. (ABT - Free Report) and Quest Diagnostics (DGX - Free Report) .
Intuitive Surgical reported a third-quarter 2024 adjusted EPS of $1.78, which beat the Zacks Consensus Estimate by 16.3%. Revenues of $2.01 billion topped the consensus estimate by 2%. ISRG currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Intuitive Surgical has an estimated long-term earnings growth rate of 16.1% in 2024 compared with the industry’s 14.1%. The company’s earnings surpassed estimates in each of the trailing four quarters, the average being 8.97%.
Abbott, carrying a Zacks Rank #2, reported third-quarter 2024 earnings of $1.14, which surpassed the Zacks Consensus Estimate by 3.6%. Revenues of $10.38 billion topped the Zacks Consensus Estimate by 0.3%.
ABT has an estimated earnings growth rate of 10.1% for 2025 compared with the S&P 500’s 9.3%. The company surpassed earnings estimates in each of the trailing four quarters, the average being 2.34%.
Quest Diagnostics, carrying a Zacks Rank #2, reported a third-quarter adjusted EPS of $2.35, which surpassed the Zacks Consensus Estimate by 1.7%. Revenues of $2.40 billion exceeded the Zacks Consensus Estimate by 0.5%.
DGX’s historical five-year earnings growth rate of 7.4% compared favorably with the industry’s 4.2%. The company surpassed earnings estimates in each of the trailing four quarters, the average being 3.31%.