On Jun 18, 2013, Zacks Investment Research reaffirmed its
long-term Neutral recommendation on
) following mixed results in the second quarter of fiscal 2013.
This leading player in the women's health market carries a Zacks
Rank #3 (Hold).
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CRYOLIFE INC (CRY): Free Stock Analysis
HOLOGIC INC (HOLX): Free Stock Analysis
HEARTWARE INTL (HTWR): Free Stock Analysis
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On May 6, Hologic reported adjusted EPS of 35 cents, beating the
Zacks Consensus Estimate by a penny and the year-ago EPS by a
couple of cents. Revenues shot up 30% year over year to $612.7
million. Despite robust growth, the top line trailed the Zacks
Consensus Estimate of $644 million.
Hologic continued to witness revenue growth on the back of
inclusion of Gen-Probe revenues, higher sales of MyoSure and
tomosynthesis systems and wider installed base of digital
mammography systems. The APTIMA STD line has been a major growth
catalyst over the past few quarters.
As per management, tests menu expansion on the PANTHER systems
presents another upside. The company is also banking on its
innovative 3D tomosysnthesis technology to drive revenues over
the long haul.
Nonetheless, Hologic faced several challenges in the quarter such
as lower sale of legacy products, disruption in ThinPrep business
in China and tough capital spending environment. Margin erosion
for its mainstay Diagnsotics franchise is also a matter of
Following the mixed second quarter results, Hologic lowered its
expectations for fiscal 2013. At present, the company envisages
adjusted revenues of $2.53−$2.55 billion compared with earlier
outlook of $2.61−$2.64 billion. The company also lowered its
adjusted EPS guidance to $1.54−$1.56 compared with the earlier
guidance of $1.58−$1.60.
While the company missed the sales expectations in the last
quarter on account of looming headwinds, the guidance cut for
fiscal 2013 underlines that the situation is not expected to
improve in the near term. Thus, we prefer to remain on the
sidelines for Hologic.
Stocks to Consider
Medical sector stocks such as
Natus Medical Inc.
), carrying a Zacks Rank #1 (Strong Buy) warrant a look. We are
also positive about
Heartware International Inc.
) doing well. These stocks carry a Zacks Rank #2 (Buy).