Hologic, Inc. (HOLX): New Analyst Report from Zacks Equity Research - Zacks Equity Research Report

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Summary:
Hologic posted a mixed third-quarter fiscal 2014 with adjusted EPS of $0.37, down 2.6% year over year, but above the Zacks Consensus Estimate by $0.03. Revenues of $632.6 million increased 1% and outpaced the Zacks Consensus Estimate of $621 million. The top line also steered past the company's guided range. Amid looming headwinds such as lower sales of legacy products, a challenging capital spending environment, European uncertainty and increasing pricing pressure, Hologic's top line was boosted by strong performance in the 3D tomosynthesis, surgical business and MyoSure product lines. Currently, management's primary goal is to sustain top- and bottom-line organic growth going ahead. 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 major cause of concern. Accordingly, we reiterate the stock at Neutral.

Overview:

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 Gen-Probe, based in San Diego, California, is 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 systems.

Subsequent to the Gen-Probe deal, Diagnostics went on to become the largest segment at Hologic (representing 46.3% of the total sales in the third quarter of 2014). Hologic operates through the following four segments:

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 assays.

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.

Revenue breakup


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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Stocks

Referenced Stocks: CAD , HOLX , HR

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