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Why Is Hologic (HOLX) Up 4.4% Since Last Earnings Report?
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It has been about a month since the last earnings report for Hologic (HOLX - Free Report) . Shares have added about 4.4% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Hologic due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Hologic reported second-quarter fiscal 2020 adjusted earnings per share of 57 cents, down 1.7% year over year. The bottom line however surpassed the Zacks Consensus Estimate by 5.6%.
On a GAAP basis, the company’s earnings of 36 cents per share reflect an improvement from the year-ago quarter’s loss of $1.01 per share.
Revenues in Detail
Revenues grossed $756.1 million in the reported quarter, down 7.6% year over year (down 7.1% at constant exchange rate or CER) due to the divestiture of Cynosure. The metric was in line with the Zacks Consensus Estimate.
Excluding the divested Blood Screening and Medical Aesthetics businesses, total revenues were $740.9 million, up 1.3% year over year and 1.9% at CER. Organic revenues (excluding divestitures and the acquired SSI business) of $735.1 million increased 0.5% and 1.1% at CER.
U.S. revenues of $574.9 million fell 6.6%. Additionally, international revenues of $181.2 million declined 10.7% or 8.6% at CER.
Organically, revenues in the United States fell 1% year over year to $558.5 million in the quarter. However, international revenues were up 6% (up 8.4% at CER) to $176.6 million.
Segments in Detail
Revenues at the Diagnostics segment rose 7.6% year over year (up 8.3% at CER) to $319.2 million in the quarter under review, with Molecular Diagnostics being the major driver. Molecular Diagnostics’ revenues of $190.6 million climbed 13.6% (up 14.2% at CER), continuing the division’s strong performance. Moreover, Blood Screening revenues of $15.2 million rose 13.5% (up 13.5% at CER).
Revenues at the Breast Health segment declined 4.3% (down 3.7% at CER) to $307.8 million. This is in line with the company’s preliminary results released earlier this month, where it had stated that weaker-than-expected sales of Breast Health products due to changing customer responses amid the COVID-19 outbreak would impact the segment’s revenues. Domestic sales were dismal in this segment in the quarter, with a 7.3% revenue decline year over year. However, outside the United States, Breast Health sales increased 7.2% in total and grew 0.6% (without SSI).
Revenues at the GYN Surgical business grew 3.1% (up 3.6% at CER) to $105.4 million, while revenues at Skeletal Health fell 2.1% (down 1.6% at CER) to $23.7 million.
Notably, the Medical Aesthetics segment no longer reports after the divestiture of Cynosure medical aesthetics business on Dec 30, 2019.
Operational Update
In the fiscal second quarter, Hologic’s adjusted gross margin remained flat year over year. According to the company, the benefits from the Cynosure Medical Aesthetics divestiture were offset by lower sales due to the pandemic, unfavorable product sales mix and a strong U.S. dollar.
Adjusted operating expenses amounted to $222.5 million, down 18.4% year over year. However, adjusted operating margin expanded 380 basis points to 31.5%.
Financial Update
Hologic exited the second quarter of fiscal 2020 with cash and cash equivalents of $799.8 million compared with $370.8 million at the end of first-quarter fiscal 2020. Total long-term debt was $3.56 billion at the end of the quarter under review, compared with $3.07 billion at the end of first-quarter fiscal 2020. The company completed the $205 million Accelerated Share Repurchase agreement announced in the first quarter and repurchased an additional 5.9 million shares of stock for $267.6 million before suspending its buy-back activities in March.
At the end of the fiscal second quarter, net cash provided by operating activities was $231.6 million compared with $238.1 million a year ago.
Guidance
Hologic expects significant adverse impact of the coronavirus pandemic on its revenues and operating income going forward. The company is currently unable to ascertain the scope and duration of the pandemic as well as quantify the actual impact. Accordingly, it has withdrawn its financial guidance for the second quarter and full-year 2020.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates flatlined during the past month. The consensus estimate has shifted -26.57% due to these changes.
VGM Scores
Currently, Hologic has an average Growth Score of C, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Hologic has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
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Why Is Hologic (HOLX) Up 4.4% Since Last Earnings Report?
It has been about a month since the last earnings report for Hologic (HOLX - Free Report) . Shares have added about 4.4% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Hologic due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Hologic Beats Q2 Earnings Estimates, Withdraws View
Hologic reported second-quarter fiscal 2020 adjusted earnings per share of 57 cents, down 1.7% year over year. The bottom line however surpassed the Zacks Consensus Estimate by 5.6%.
On a GAAP basis, the company’s earnings of 36 cents per share reflect an improvement from the year-ago quarter’s loss of $1.01 per share.
Revenues in Detail
Revenues grossed $756.1 million in the reported quarter, down 7.6% year over year (down 7.1% at constant exchange rate or CER) due to the divestiture of Cynosure. The metric was in line with the Zacks Consensus Estimate.
Excluding the divested Blood Screening and Medical Aesthetics businesses, total revenues were $740.9 million, up 1.3% year over year and 1.9% at CER. Organic revenues (excluding divestitures and the acquired SSI business) of $735.1 million increased 0.5% and 1.1% at CER.
U.S. revenues of $574.9 million fell 6.6%. Additionally, international revenues of $181.2 million declined 10.7% or 8.6% at CER.
Organically, revenues in the United States fell 1% year over year to $558.5 million in the quarter. However, international revenues were up 6% (up 8.4% at CER) to $176.6 million.
Segments in Detail
Revenues at the Diagnostics segment rose 7.6% year over year (up 8.3% at CER) to $319.2 million in the quarter under review, with Molecular Diagnostics being the major driver. Molecular Diagnostics’ revenues of $190.6 million climbed 13.6% (up 14.2% at CER), continuing the division’s strong performance. Moreover, Blood Screening revenues of $15.2 million rose 13.5% (up 13.5% at CER).
Revenues at the Breast Health segment declined 4.3% (down 3.7% at CER) to $307.8 million. This is in line with the company’s preliminary results released earlier this month, where it had stated that weaker-than-expected sales of Breast Health products due to changing customer responses amid the COVID-19 outbreak would impact the segment’s revenues. Domestic sales were dismal in this segment in the quarter, with a 7.3% revenue decline year over year. However, outside the United States, Breast Health sales increased 7.2% in total and grew 0.6% (without SSI).
Revenues at the GYN Surgical business grew 3.1% (up 3.6% at CER) to $105.4 million, while revenues at Skeletal Health fell 2.1% (down 1.6% at CER) to $23.7 million.
Notably, the Medical Aesthetics segment no longer reports after the divestiture of Cynosure medical aesthetics business on Dec 30, 2019.
Operational Update
In the fiscal second quarter, Hologic’s adjusted gross margin remained flat year over year. According to the company, the benefits from the Cynosure Medical Aesthetics divestiture were offset by lower sales due to the pandemic, unfavorable product sales mix and a strong U.S. dollar.
Adjusted operating expenses amounted to $222.5 million, down 18.4% year over year. However, adjusted operating margin expanded 380 basis points to 31.5%.
Financial Update
Hologic exited the second quarter of fiscal 2020 with cash and cash equivalents of $799.8 million compared with $370.8 million at the end of first-quarter fiscal 2020. Total long-term debt was $3.56 billion at the end of the quarter under review, compared with $3.07 billion at the end of first-quarter fiscal 2020. The company completed the $205 million Accelerated Share Repurchase agreement announced in the first quarter and repurchased an additional 5.9 million shares of stock for $267.6 million before suspending its buy-back activities in March.
At the end of the fiscal second quarter, net cash provided by operating activities was $231.6 million compared with $238.1 million a year ago.
Guidance
Hologic expects significant adverse impact of the coronavirus pandemic on its revenues and operating income going forward. The company is currently unable to ascertain the scope and duration of the pandemic as well as quantify the actual impact. Accordingly, it has withdrawn its financial guidance for the second quarter and full-year 2020.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates flatlined during the past month. The consensus estimate has shifted -26.57% due to these changes.
VGM Scores
Currently, Hologic has an average Growth Score of C, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Hologic has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.