) reported net loss of $77.8 million or 29 cents per share in the
fourth quarter of fiscal 2012 compared with income of $27.6
million or 10 cents per share in the year-ago quarter. After
taking into account certain one-time items, adjusted earnings
came in at 37 cents. The result surpassed the Zacks Consensus
Estimate by a penny, and beat the year-ago adjusted earnings of
34 cents as well. For the full year, adjusted earnings were $1.38
per share, in line with the Zacks Consensus Estimate, but
surpassing the previous year's $1.27 per share.
Revenues were $588.5 million in the quarter, an increase of
26% year over and ahead of the Zacks Consensus Estimate of $559
million. However, this was excluding the $11.6 million of
contingent revenue received under an agreement of Gen-Probe with
). Hologic completed the acquisition of Gen-Probe on August 1,
2012. The company's legacy business recorded revenues of $499.1
million, up 7% year over year and exceeding its guidance of $485
million. For fiscal 2012, the company reported $2 billion as
revenues, increasing 11.9% and surpassing the Zacks Consensus
Estimate of $1.9 billion.
Subsequent to the Gen-Probe deal, Diagnostics became the
largest segment at Hologic, recording revenues of $253.5 million
during the reported quarter compared with $150.5 million in the
year-ago quarter. The upside was primarily based on the inclusion
of Gen-Probe revenues ($89.5 million or $101.1 million as
adjusted), higher ThinPrep revenues and strong growth in the
molecular diagnostics products.
Last month, the company's Aptima HPV 16 18/45 genotype assay
received approval from the US Food and Drug Administration
('FDA') for use on the Tigris system.
The company's other segments − Breast Health, GYN Surgical and
Skeletal Health − recorded respective sales of $230.3 million (up
5.1% year over year), $79.7 million (up 7.7%) and $25.1 million
The upside at the Breast Health segment was driven by an
increase in service revenues related to the growing installed
base of digital mammography systems. During the third quarter,
the faster-than-expected shift in demand from 2D to 3D systems
delayed installations and led to a higher-than-expected backlog
of units. These units were successfully shipped during the
reported quarter. Moreover, Hologic has achieved its target of
placing 60% of the 500−700 units by the end of fiscal 2012, and
now expects the installed base in the US to nearly double in
After adjusting for the discontinuance of Adiana, the GYN
Surgical business recorded growth of 17% year over year. The
growth was attributable to strong performance of MyoSure systems
with revenues increasing nearly thrice from the year-ago period.
Moreover, owing to the recovery in NovaSure, this business
recorded growth both year-over-year and sequentially.
Hologic provided its guidance for the first quarter as well as
fiscal 2013. For the said quarter, the company expects adjusted
revenues of $640−$645 million (representing annualized growth of
35−36%) resulting in adjusted earnings of 37 cents per share, a
penny lower than the current Zacks Consensus Estimate. The
revenue guidance excludes an expected purchase accounting
reduction of $17 million related to the Novartis collaboration
and is higher than the current Zacks Consensus revenue estimate
of $583 million.
For fiscal 2013, Hologic expects to report adjusted revenues
of $2.61−$2.64 billion, representing 30−31% growth, resulting in
adjusted EPS of $1.56−$1.58. While the revenue guidance excludes
an expected purchase accounting reduction of $22 million related
to the Novartis collaboration, the EPS outlook takes into account
additional expected interest expense of $180 million related to
the financing of the Gen-Probe acquisition and a $25 million
charge for the medical device excise tax beginning January 1,
2013. While the revenue outlook surpassed the current Zacks
Consensus Estimate of $2.3 billion, the EPS guidance fell short
of the current consensus of $1.61.
We are encouraged by a strong quarter from Hologic amidst
economic uncertainties in Europe, slower sales cycles and
increasing pricing pressure. The increasing acceptance of the 3D
Dimensions system is a cause to cheer. We are also
encouraged with the improving growth in GYN Surgical, with
increased focus on NovaSure and MyoSure systems. Offering a wide
range of products, Hologic has become an industry giant in the
field of women's health.
With the Gen-Probe acquisition, Hologic has further
strengthened its foothold in the HPV business. This specialized
niche has players like
) among others. Moreover, an increasing debt burden along with
higher interest expense will continue to affect the bottom
We have a Neutral recommendation on Hologic. The stock retains
a Zacks #3 Rank ("Hold") in the short term.
HOLOGIC INC (HOLX): Free Stock Analysis
NOVARTIS AG-ADR (NVS): Free Stock Analysis
QIAGEN NV (QGEN): Free Stock Analysis Report
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