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Can Diagnostics Aid Hologic (HOLX) Q2 Sales Amid Coronavirus?
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Hologic, Inc. (HOLX - Free Report) is slated to report second-quarter fiscal 2020 results on Apr 29, after the closing bell. In the last reported quarter, the company’s earnings of 61 cents were in line with the Zacks Consensus Estimate. However, its earnings surpassed the consensus estimate in two of the last four quarters and met the mark in the other two. The trailing four-quarter average positive surprise was 1.3%.
Let's see how things are shaping up prior to the announcement.
Factors at Play
Through the second quarter, quarantine restrictions were imposed in several nations to control the coronavirus outbreak, resulting in massive disruption in the global supply chain. Further, non-emergency and elective healthcare healthcare activities were postponed during this period to focus more on coronavirus-led damage control. Hence, Hologic, which has a strong international presence, is likely to have seen significant negative impact on sales in the latter part of March as anticipated when it released its preliminary fiscal second-quarter results in early April.
Hologic expects weaker-than-expected sales at Breast Health due to changing customer responses amid the COVID-19 outbreak. Additionally, sales of GYN Surgical and certain non COVID-19 Diagnostics products are expected to have been significantly dented in the second quarter due to the deferral of elective procedures and physician office visits.
Overall, the company expects its Diagnostics segment to have maintained a stellar performance in the fiscal second quarter on new Molecular Diagnostics testing products for coronavirus. Notably, in the fiscal second quarter, Hologic received the FDA’s EUA for its new Panther Fusion SARS-CoV-2 assay.
In the United States, it is likely to have gained from expanding market share and increasing utilization of the Panther system — the fully-automated molecular diagnostics instrument.
The company’s Panther Fusion platform has likely maintained momentum, thus contributing to the top line. The Molecular Diagnostics segment is expected to have witnessed global growth in the quarter on strength in the Panther system.
Per the company’s preliminary results, the segment has seen revenue growth of 7.6% (8.3% at constant exchange rate or CER). The Zacks Consensus Estimate for Molecular Diagnostics’ revenues is pegged at $184 million, suggesting a 9.5% increase from the year-ago quarter’s reported level.
Meanwhile, let us delve deeper into how the other core business segments have fared during the second quarter.
GYN Surgical
Hologic is expected to have witnessed an uptick in this segment’s revenues despite the deferral of elective procedures and physician office visits affecting product sales. The company’s MyoSure Hysteroscopic Tissue Removal System is likely to have remained strong in the second quarter backed by an expanding market for fibroid removal. The performance of NovaSure Endometrial Ablation System had improved in the first quarter of fiscal 2020, which is likely to have been sustained in the second quarter as well. The Fluent Fluid Management System is expected to have been another contributor to Hologic’s top line.
Per the company’s preliminary results, this segment is estimated to grow 3.1% (up 3.6% at CER) on a year-over-year basis. The Zacks Consensus Estimate for GYN Surgical’s revenues is pegged at $108 million, suggesting a 5.9% increase from the year-ago quarter’s reported level.
Breast Health
In the first half of the second quarter, the Breast Health segment’s results are expected to be strong on the company’s core 3D Mammography business. This business has been witnessing robust growth over the past few quarters.
The Faxitron and Focal brands from the company’s new breast surgery franchise are expected to have driven the company’s top line in the fiscal second quarter. Within the business, growth of Breast Imaging and Interventional Breast Solutions sub-segments is likely to have aided performance in the quarter to-be-reported.
Breast Health revenues are likely to fall 4.3% (down 3.7% at CER) on a year-over-year basis, per the company’s preliminary results. The Zacks Consensus Estimate for the segment’s revenues is pegged at $324 million, indicating a rise of 0.6% from the prior-year quarter’s figure.
Preliminary Total Revenues
The overall preliminary results for the to-be-reported quarter suggest a decline in total revenues of 7.6% (down 7.1% at CER) on a year-over-year basis to $756.1 million due to the Cynosure divestiture. Organic revenues of $735.1 million are expected to increase 0.5% (up 1.1% at CER).
Q2 Estimates
The Zacks Consensus Estimate for second-quarter fiscal 2020 revenues is pegged at $762 million.
The Zacks Consensus Estimate for the company’s earnings of 57 cents suggests a 1.7% fall from the year-ago figure.
What Our Model Suggests
Per our proven model, a stock with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) along with a positive Earnings ESP has good chances of beating estimates. However, this is not the case here as you can see:
Zacks Rank: The company currently carries a Zacks Rank #3.
Earnings ESP: Hologic has an Earnings ESP of -4.31%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks Worth a Look
Here are a few medical stocks worth considering, as these have the right combination of elements to beat on earnings this reporting cycle.
Aphria Inc. , carrying a Zacks Rank of 2 at present, has an Earnings ESP of +35.71%.
DexCom, Inc. (DXCM - Free Report) is a Zacks #2 Ranked stock with an Earnings ESP of +143.90%.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
Image: Bigstock
Can Diagnostics Aid Hologic (HOLX) Q2 Sales Amid Coronavirus?
Hologic, Inc. (HOLX - Free Report) is slated to report second-quarter fiscal 2020 results on Apr 29, after the closing bell. In the last reported quarter, the company’s earnings of 61 cents were in line with the Zacks Consensus Estimate. However, its earnings surpassed the consensus estimate in two of the last four quarters and met the mark in the other two. The trailing four-quarter average positive surprise was 1.3%.
Let's see how things are shaping up prior to the announcement.
Factors at Play
Through the second quarter, quarantine restrictions were imposed in several nations to control the coronavirus outbreak, resulting in massive disruption in the global supply chain. Further, non-emergency and elective healthcare healthcare activities were postponed during this period to focus more on coronavirus-led damage control. Hence, Hologic, which has a strong international presence, is likely to have seen significant negative impact on sales in the latter part of March as anticipated when it released its preliminary fiscal second-quarter results in early April.
Hologic expects weaker-than-expected sales at Breast Health due to changing customer responses amid the COVID-19 outbreak. Additionally, sales of GYN Surgical and certain non COVID-19 Diagnostics products are expected to have been significantly dented in the second quarter due to the deferral of elective procedures and physician office visits.
Hologic, Inc. Price and EPS Surprise
Hologic, Inc. price-eps-surprise | Hologic, Inc. Quote
Overall, the company expects its Diagnostics segment to have maintained a stellar performance in the fiscal second quarter on new Molecular Diagnostics testing products for coronavirus. Notably, in the fiscal second quarter, Hologic received the FDA’s EUA for its new Panther Fusion SARS-CoV-2 assay.
In the United States, it is likely to have gained from expanding market share and increasing utilization of the Panther system — the fully-automated molecular diagnostics instrument.
The company’s Panther Fusion platform has likely maintained momentum, thus contributing to the top line. The Molecular Diagnostics segment is expected to have witnessed global growth in the quarter on strength in the Panther system.
Per the company’s preliminary results, the segment has seen revenue growth of 7.6% (8.3% at constant exchange rate or CER). The Zacks Consensus Estimate for Molecular Diagnostics’ revenues is pegged at $184 million, suggesting a 9.5% increase from the year-ago quarter’s reported level.
Meanwhile, let us delve deeper into how the other core business segments have fared during the second quarter.
GYN Surgical
Hologic is expected to have witnessed an uptick in this segment’s revenues despite the deferral of elective procedures and physician office visits affecting product sales. The company’s MyoSure Hysteroscopic Tissue Removal System is likely to have remained strong in the second quarter backed by an expanding market for fibroid removal. The performance of NovaSure Endometrial Ablation System had improved in the first quarter of fiscal 2020, which is likely to have been sustained in the second quarter as well. The Fluent Fluid Management System is expected to have been another contributor to Hologic’s top line.
Per the company’s preliminary results, this segment is estimated to grow 3.1% (up 3.6% at CER) on a year-over-year basis. The Zacks Consensus Estimate for GYN Surgical’s revenues is pegged at $108 million, suggesting a 5.9% increase from the year-ago quarter’s reported level.
Breast Health
In the first half of the second quarter, the Breast Health segment’s results are expected to be strong on the company’s core 3D Mammography business. This business has been witnessing robust growth over the past few quarters.
The Faxitron and Focal brands from the company’s new breast surgery franchise are expected to have driven the company’s top line in the fiscal second quarter. Within the business, growth of Breast Imaging and Interventional Breast Solutions sub-segments is likely to have aided performance in the quarter to-be-reported.
Breast Health revenues are likely to fall 4.3% (down 3.7% at CER) on a year-over-year basis, per the company’s preliminary results. The Zacks Consensus Estimate for the segment’s revenues is pegged at $324 million, indicating a rise of 0.6% from the prior-year quarter’s figure.
Preliminary Total Revenues
The overall preliminary results for the to-be-reported quarter suggest a decline in total revenues of 7.6% (down 7.1% at CER) on a year-over-year basis to $756.1 million due to the Cynosure divestiture. Organic revenues of $735.1 million are expected to increase 0.5% (up 1.1% at CER).
Q2 Estimates
The Zacks Consensus Estimate for second-quarter fiscal 2020 revenues is pegged at $762 million.
The Zacks Consensus Estimate for the company’s earnings of 57 cents suggests a 1.7% fall from the year-ago figure.
What Our Model Suggests
Per our proven model, a stock with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) along with a positive Earnings ESP has good chances of beating estimates. However, this is not the case here as you can see:
Zacks Rank: The company currently carries a Zacks Rank #3.
Earnings ESP: Hologic has an Earnings ESP of -4.31%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks Worth a Look
Here are a few medical stocks worth considering, as these have the right combination of elements to beat on earnings this reporting cycle.
Exact Sciences Corporation (EXAS - Free Report) currently carries a Zacks Rank of 2 and has an Earnings ESP of +26.79%. You can see the complete list of today’s Zacks #1 Rank stocks here.
Aphria Inc. , carrying a Zacks Rank of 2 at present, has an Earnings ESP of +35.71%.
DexCom, Inc. (DXCM - Free Report) is a Zacks #2 Ranked stock with an Earnings ESP of +143.90%.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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