We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Hologic's (HOLX) Q2 Earnings Meet Estimates, Revenues Top
Read MoreHide Full Article
Hologic, Inc. (HOLX - Free Report) reported second-quarter fiscal 2018 adjusted earnings per share (EPS) of 53 cents, up 6% year over year and in line with the low end of the company’s 53-54 cents guidance. Adjusted EPS was also on par with the Zacks Consensus Estimate.
On a reported basis, the company recorded net loss of $2.46 per share, against net income of $1.84 in second-quarter fiscal 2017. Notably, the reported figure includes non-cash impairment charges for goodwill and in-process research and development associated with Hologic's Cynosure business.
Revenues in Detail
Revenues grossed $789.3 million in the quarter, up 10.3% year over year (up 8.3% at constant exchange rate or CER). The top line surpassed the Zacks Consensus Estimate of $780.1 million and the company’s guidance of $770-$785 million.
Solid contributions from Breast Health and international business drove the top line.
Geographically, revenues in the United States grew 3.3% year over year to $588.5 million. Excluding blood screening and medical aesthetics, U.S. revenues declined marginally. International revenues were up 37.8% (up 28% at CER) to $200.8 million, on strong contribution from Cynosure. Excluding blood screening and medical aesthetics, international revenues increased 26.4% or 15.1% at constant currency.
Revenues at the Diagnostics segment (35.4% of total revenues) declined 5.5% year over year (down 7.6% at CER) to $279.7 million in the second quarter. Under this segment, Molecular Diagnostics revenues of $150.7 million increased 6.1% (4.4% at CER). The global growth at Molecular Diagnostics was primarily driven by new product revenues along with continued solid uptake of Aptima women's health products.
Cytology and Perinatal revenues of $117.7 million also showed an improvement of 1.8% (down 1.4% at CER).
Revenues at the Breast Health segment (38%) inched up 7% (up 4.9% at CER) to $300.1 million. Revenue growth in the United States was roughly flat. In the reported quarter, the upside was led by higher service and new product revenues. International revenues however climbed 27.6% year over year, marking the third consecutive quarter of growth exceeding 20%.
Revenues from the GYN Surgical business (12.6%) were down 1.7% (down 3.2% at CER) to $99.4 million. Medical Aesthetic business in the quarter reported revenues of $85.5 million, reflecting 10.8% of total revenues. Revenues at Skeletal Health (accounting for the rest) increased 12.6% (up 9.9% at CER) to $24.6 million.
Operational Update
In the fiscal second quarter, Hologic’s gross margin contracted 170 basis points (bps) to 52.6%. Adjusted gross margin also decreased 120 bps to 62.7% due to the divestiture of blood screening business, geographic mix and revenues from low-margin Cynosure products.
Hologic’s adjusted operating expenses amounted to $266.9 million, up 19.7% year over year. Adjusted operating margin contracted a massive 380 bps to 28.9%.
Financial Update
Hologic exited second-quarter fiscal 2018 with cash and cash equivalents of $614.2 million, compared with $664.4 million at the end of first-quarter fiscal 2018. Total long-term debt was $2.74 billion at the end of the reported quarter, compared with $2.76 billion in first-quarter fiscal 2018.
During the quarter, the company generated operating cash flow of $266.5 million, compared with the year-ago $253.4 million.
Guidance
Hologic has updated its fiscal 2018 financial guidance. The company currently expects adjusted revenues of $3.18-$3.21 billion, compared with the previous range of $3.2-$3.28 billion. The company expects revenues to grow in the range of 2.7-3.7% compared with the previously provided range of 3.9-6.5% at CER. The Zacks Consensus Estimate for revenues is $3.25 billion, above the guided range.
Adjusted EPS guidance remains unchanged, calling for 9.4-11.8% growth to $2.22-$2.27. The Zacks Consensus Estimate for adjusted EPS is pegged at $2.25, within the guided range.
For third-quarter fiscal 2018, Hologic expects adjusted revenues of $795-$810 million, representing annualized decline of 1% to 2.8% at CER. The Zacks Consensus Estimate for revenues is pegged at $832.4 million, above the projected range.
Adjusted EPS is estimated at 55-57 cents, reflecting an annualized growth of 10-14%. The Zacks Consensus Estimate for third-quarter adjusted EPS is pinned at 58 cents, above the company’s guidance.
Our Take
Hologic exited second-quarter fiscal 2018 on a mixed note. Growth across all geographical regions buoys optimism. However, we are disappointed with the decline in revenues at the Diagnostics segment. The blood screening divestiture is also likely to impede growth for the company. Further, the company’s lowering of the revenue guidance for fiscal 2018 on reduced sales expectations from the Cynosure business raises concern.
Zacks Rank & Key Picks
Hologic carries a Zacks Rank #4 (Sell).
A few better-ranked stocks in the broader medical sector which reported solid results this season are Intuitive Surgical (ISRG - Free Report) , Chemed Corporation (CHE - Free Report) and Baxter International Inc. (BAX - Free Report) . While Intuitive Surgical sports a Zacks Rank #1 (Strong Buy), Chemed and Baxter carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Intuitive Surgical reported first-quarter 2018 adjusted EPS of $2.44, which beat the Zacks Consensus Estimate by 22.6%. Revenues totaled $848 million, also surpassing the consensus estimate by 10.6%.
Chemed posted first-quarter 2018 adjusted EPS of $2.72, steering past the Zacks Consensus Estimate of $2.37. Revenues came in at $439.2 million, beating the Zacks Consensus Estimate of $420 million.
Baxter posted first-quarter 2018 adjusted EPS of 70 cents, which beat the Zacks Consensus Estimate by 12.9%. Revenues of $2.68 billion also edged past the Zacks Consensus Estimate of $2.62 billion.
5 Medical Stocks to Buy Now
Zacks names 5 companies poised to ride a medical breakthrough that is targeting cures for leukemia, AIDS, muscular dystrophy, hemophilia, and other conditions.
New products in this field are already generating substantial revenue and even more wondrous treatments are in the pipeline. Early investors could realize exceptional profits. Click here to see the 5 stocks >>
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Hologic's (HOLX) Q2 Earnings Meet Estimates, Revenues Top
Hologic, Inc. (HOLX - Free Report) reported second-quarter fiscal 2018 adjusted earnings per share (EPS) of 53 cents, up 6% year over year and in line with the low end of the company’s 53-54 cents guidance. Adjusted EPS was also on par with the Zacks Consensus Estimate.
On a reported basis, the company recorded net loss of $2.46 per share, against net income of $1.84 in second-quarter fiscal 2017. Notably, the reported figure includes non-cash impairment charges for goodwill and in-process research and development associated with Hologic's Cynosure business.
Revenues in Detail
Revenues grossed $789.3 million in the quarter, up 10.3% year over year (up 8.3% at constant exchange rate or CER). The top line surpassed the Zacks Consensus Estimate of $780.1 million and the company’s guidance of $770-$785 million.
Solid contributions from Breast Health and international business drove the top line.
Geographically, revenues in the United States grew 3.3% year over year to $588.5 million. Excluding blood screening and medical aesthetics, U.S. revenues declined marginally. International revenues were up 37.8% (up 28% at CER) to $200.8 million, on strong contribution from Cynosure. Excluding blood screening and medical aesthetics, international revenues increased 26.4% or 15.1% at constant currency.
Hologic, Inc. Price, Consensus and EPS Surprise
Hologic, Inc. Price, Consensus and EPS Surprise | Hologic, Inc. Quote
Segments in Detail
Revenues at the Diagnostics segment (35.4% of total revenues) declined 5.5% year over year (down 7.6% at CER) to $279.7 million in the second quarter. Under this segment, Molecular Diagnostics revenues of $150.7 million increased 6.1% (4.4% at CER). The global growth at Molecular Diagnostics was primarily driven by new product revenues along with continued solid uptake of Aptima women's health products.
Cytology and Perinatal revenues of $117.7 million also showed an improvement of 1.8% (down 1.4% at CER).
Revenues at the Breast Health segment (38%) inched up 7% (up 4.9% at CER) to $300.1 million. Revenue growth in the United States was roughly flat. In the reported quarter, the upside was led by higher service and new product revenues. International revenues however climbed 27.6% year over year, marking the third consecutive quarter of growth exceeding 20%.
Revenues from the GYN Surgical business (12.6%) were down 1.7% (down 3.2% at CER) to $99.4 million. Medical Aesthetic business in the quarter reported revenues of $85.5 million, reflecting 10.8% of total revenues. Revenues at Skeletal Health (accounting for the rest) increased 12.6% (up 9.9% at CER) to $24.6 million.
Operational Update
In the fiscal second quarter, Hologic’s gross margin contracted 170 basis points (bps) to 52.6%. Adjusted gross margin also decreased 120 bps to 62.7% due to the divestiture of blood screening business, geographic mix and revenues from low-margin Cynosure products.
Hologic’s adjusted operating expenses amounted to $266.9 million, up 19.7% year over year. Adjusted operating margin contracted a massive 380 bps to 28.9%.
Financial Update
Hologic exited second-quarter fiscal 2018 with cash and cash equivalents of $614.2 million, compared with $664.4 million at the end of first-quarter fiscal 2018. Total long-term debt was $2.74 billion at the end of the reported quarter, compared with $2.76 billion in first-quarter fiscal 2018.
During the quarter, the company generated operating cash flow of $266.5 million, compared with the year-ago $253.4 million.
Guidance
Hologic has updated its fiscal 2018 financial guidance. The company currently expects adjusted revenues of $3.18-$3.21 billion, compared with the previous range of $3.2-$3.28 billion. The company expects revenues to grow in the range of 2.7-3.7% compared with the previously provided range of 3.9-6.5% at CER. The Zacks Consensus Estimate for revenues is $3.25 billion, above the guided range.
Adjusted EPS guidance remains unchanged, calling for 9.4-11.8% growth to $2.22-$2.27. The Zacks Consensus Estimate for adjusted EPS is pegged at $2.25, within the guided range.
For third-quarter fiscal 2018, Hologic expects adjusted revenues of $795-$810 million, representing annualized decline of 1% to 2.8% at CER. The Zacks Consensus Estimate for revenues is pegged at $832.4 million, above the projected range.
Adjusted EPS is estimated at 55-57 cents, reflecting an annualized growth of 10-14%. The Zacks Consensus Estimate for third-quarter adjusted EPS is pinned at 58 cents, above the company’s guidance.
Our Take
Hologic exited second-quarter fiscal 2018 on a mixed note. Growth across all geographical regions buoys optimism. However, we are disappointed with the decline in revenues at the Diagnostics segment. The blood screening divestiture is also likely to impede growth for the company. Further, the company’s lowering of the revenue guidance for fiscal 2018 on reduced sales expectations from the Cynosure business raises concern.
Zacks Rank & Key Picks
Hologic carries a Zacks Rank #4 (Sell).
A few better-ranked stocks in the broader medical sector which reported solid results this season are Intuitive Surgical (ISRG - Free Report) , Chemed Corporation (CHE - Free Report) and Baxter International Inc. (BAX - Free Report) . While Intuitive Surgical sports a Zacks Rank #1 (Strong Buy), Chemed and Baxter carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Intuitive Surgical reported first-quarter 2018 adjusted EPS of $2.44, which beat the Zacks Consensus Estimate by 22.6%. Revenues totaled $848 million, also surpassing the consensus estimate by 10.6%.
Chemed posted first-quarter 2018 adjusted EPS of $2.72, steering past the Zacks Consensus Estimate of $2.37. Revenues came in at $439.2 million, beating the Zacks Consensus Estimate of $420 million.
Baxter posted first-quarter 2018 adjusted EPS of 70 cents, which beat the Zacks Consensus Estimate by 12.9%. Revenues of $2.68 billion also edged past the Zacks Consensus Estimate of $2.62 billion.
5 Medical Stocks to Buy Now
Zacks names 5 companies poised to ride a medical breakthrough that is targeting cures for leukemia, AIDS, muscular dystrophy, hemophilia, and other conditions.
New products in this field are already generating substantial revenue and even more wondrous treatments are in the pipeline. Early investors could realize exceptional profits.
Click here to see the 5 stocks >>