Hologic posted a promising fourth-quarter fiscal 2014 with adjusted
EPS of $0.43, up 10.3% year over year, beating the Zacks Consensus
Estimate by 16.2%. Revenues of $660.6 million rose 6.2% and topped
the $636 million estimate. The top line also steered past the
company's guidance. Despite looming headwinds such as lower sales
of legacy products, a challenging capital spending environment,
economic uncertainty in Europe and increasing pricing pressure,
Hologic's top line received a boost from the strong performance in
the surgical and diagnostics businesses. Further the recent
reimbursement rate for 3D tomosynthesis is expected to increase
this exam's demand. Hologic is also working on the divesture of
some of its smaller businesses to focus on the more profitable
ones. However, growing operating expenses remain a major cause of
concern. Accordingly, we reiterate the stock at Neutral.
Headquartered in Bedford, MA, Hologic Inc. develops,
manufactures, and supplies diagnostics, medical imaging systems and
surgical products which cater to the healthcare needs of women. The
company is focused on mammography systems for breast examination
and osteoporosis assessment. The company also provides a
comprehensive suite of technologies with products for mammography
and breast biopsy, radiation treatment for early-stage breast
cancer, cervical cancer screening, and treatment for menorrhagia,
osteoporosis assessment, preterm birth risk assessment, and mini
C-arm for extremity imaging.
In Aug 2012, Hologic acquired San Diego-based Gen-Probe, a
leader in molecular diagnostics products and services that are used
primarily to diagnose human diseases and screen donated human
blood. Gen-Probe's results of operations are reported within
Hologic s Diagnostics segment from the date of acquisition. The
acquisition has helped Hologic derive the lion s share of its
revenues from the diagnostics business and gain access to
Gen-Probe's molecular diagnostic platforms of TIGRIS and PANTHER
Subsequent to the Gen-Probe deal, Diagnostics went on to become
the largest segment at Hologic (representing 46.4% of the total
sales in 4Q14). Hologic operates through the following four
Diagnostics: With the Gen-Probe acquisition, Hologic currently
offers APTIMA family of assays that includes the APTIMA Combo 2
assay, which feature the APTIMA CT and APTIMA GC assays for the
detection of Chlamydia and gonorrhea, respectively, the APTIMA HPV
assay for the detection of 14 sub-types of high-risk HPV associated
with cervical cancer, and the APTIMA Trichomonas assay for the
detection of Trichomonas vaginalis. The instrumentation also
includes the TIGRIS system and the PANTHER instrument system used
to run a number of infectious disease and blood screening
Other products include the ThinPrep system, primarily used in
cytology applications. The current molecular diagnostic offerings
include Cervista HPV high risk (HR) and Cervista HPV 16/18 products
to assist in the diagnosis of human papillomavirus (HPV), as well
as other products to diagnose cystic fibrosis, cardiovascular risk
and other diseases.
Breast Health: Products include a broad portfolio of breast
imaging and related products and accessories, including digital and
film-based mammography systems, computer-aided detection (CAD),
breast biopsy guidance systems, minimally invasive breast biopsy
and tissue extraction devices and breast brachytherapy products.
The advanced breast imaging platform utilizes tomosynthesis
technology to produce both three-dimensional (3D) and two
dimensional (2D) full field digital mammography images.
GYN Surgical: Products include the NovaSure endometrial ablation
system and the MyoSure hysteroscopic tissue removal system.
NovaSure system is a minimally invasive procedure for the treatment
of heavy menstrual bleeding while MyoSure is a tissue removal
device to provide incision less removal of fibroids and polyps
within the uterus.
Skeletal Health: This segment includes dual-energy X-ray bone
densitometry systems, an ultrasound-based osteoporosis assessment
product, and Fluoroscan mini C-arm imaging products.
Hologic, Inc. (HOLX): Read the Full Research
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