Hologic’s Q3 Performance Beats the Street’s Expectations

Bedford, Mass.-based Hologic Inc. reported fiscal third-quarter net income of $29.4 million.

The company had net income of 10 cents per share. Earnings, adjusted for one-time gains and costs, were 43 cents per share.

The results beat Wall Street analysts’ expectations. The average estimate of 11 analysts surveyed by Zacks Investment Research was for earnings of 39 cents per share.
The company reported revenue of $693.9 million in the period, which also beat forecasts. Analysts surveyed by Zacks expected $652.5 million.

Impressive double-digit growth in the Breast Health segment primarily drove the year-over-year top-line improvement, Zacks analysts said.

“Our third quarter financial results demonstrate the significant progress we have made in building a company that can grow sustainably on both the top and bottom lines,” said Steve MacMillan, Hologic’s chairman, president and CEO.  “Growth was led by accelerated adoption of our Genius 3D mammography systems, but our diagnostics and surgical businesses also showed broad-based strength.  While we are proud of our accomplishments to date, we also believe we have multiple growth opportunities still ahead of us.”

Revenues from the Diagnostics segment (44.2 percent of total revenue) grew 4.7 percent year over year to $306.9 million in the quarter. Growth was primarily driven by global blood screening and molecular diagnostics revenues, which improved 18.5 percent and 8.9 percent, respectively. However, revenues from cytology and perinatal products remained flat at $118.1 million.

The Breast Health segment (40.3 percent of revenue) improved 17.5 percent to $279.5 million. Growth was primarily driven by accelerating demand for Hologic’s 3-D mammography systems. Also, a 24.2 percent increase in breast imaging sales at consistent exchange rates contributed to this growth.

The GYN Surgical business (12.3 percent) grew 8.9 precent to $85.5 million, on account of more than 30 percent growth in MyoSure system sales. Revenues from Skeletal Health (accounting for the rest) dropped 4.7 percent to $22 million, primarily driven by declining international sales as distributor ordering patterns fluctuated, analysts noted.

“All of our key women’s health assays for chlamydia and gonorrhea, [human papillomavirus], and trichomonas grew solidly in the quarter, and all won important new competitive accounts,” MacMillan said during a conference call, adding that the Panther instrument continued to see new adoptions in the quarter. Placements of the instrument were “robust” in Q3, and Hologic has now shipped “well over 1,000” Panther units to clinical diagnostics and blood screening customers.

For the current quarter ending in September, Hologic expects its per-share earnings to range from 41 cents to 42 cents. The company said it expects revenue in the range of $685 million to $695 million for the fiscal fourth quarter. Zacks analysts expected revenue of $655.6 million.

Hologic expects full-year earnings in the range of $1.65 to $1.66 per share, with revenue ranging from $2.69 billion to $2.7 billion.

Hologic shares have risen 42 percent since the beginning of the year.