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Hologic Posts Solid Preliminary Q1 Sales, Revises Buyback Plan

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Hologic Inc. (HOLX - Free Report) recently announced preliminary revenue results for first-quarter fiscal 2020. The company is slated to release its detailed financial results for the period on Jan 29.

Hologic projects an impressive performance for the fiscal first quarter, expecting to exceed its own estimates on the revenue front. However, this fails to impact the stock price which dipped 0.2% to reach $53.17 at Jan 10’s close.

In the to-be-reported quarter, Hologic expects total revenues to inch up 2.4% (up 2.8% at constant exchange rate or CER) on a year-over-year basis to $850.5 million, ahead of the current Zacks Consensus Estimate of $844.03 million. This also marginally exceeds the upper limit of the company's earlier provided revenue guidance of $835-$850 million. 

Excluding Acquisitions and Divestitures, revenues are predicted to increase 4.1% (up 4.6% at CER).

According to the company, in the fiscal first quarter, revenues were strong within Surgical and Diagnostics. However, this was more than offset by weakness in the divested Medical Aesthetics business.

Diagnostics (36.6% of total revenues) is likely to rise 5.5% at CER to $311.5 million. Breast Health (38.9%) is estimated to grow 2.4% on a year-over-year basis to $331.1 million. GYN Surgical (14%) revenues are envisioned to ascend 10.2% on a year-over-year basis to $119.1 million. Skeletal Health (2.8%) is anticipated to improve 11.4% year over year to $23.5 million. However, Medical Aesthetics is forecast to decline 17.7% at CER to touch $65.3 million in the quarter to be reported.

Per the company’s last-updated outlook, adjusted EPS is assumed to be 59-61 cents for first-quarter fiscal 2020.

Share Repurchase Update

The board of directors recently approved a new $500-million worth share repurchase authorization effective third-quarter fiscal 2020 following the expiration of the company’s existing buyback plan.

Share Price Movement

Hologic has underperformed its industry over the past three months. The stock has gained 9.6% compared with the 12.2% rise of the industry.

Zacks Rank & Other Key Picks

Currently, Hologic carries a Zacks Rank #2 (Buy). Some other top-ranked stocks from the broader medical space are Haemonetics Corporation (HAE - Free Report) , Hill-Rom Holdings, Inc and Vapotherm, Inc (VAPO - Free Report) .

Haemonetics has a Zacks Rank #1 (Strong Buy) and a projected long-term earnings growth rate of 13.5%. You can see the complete list of today’s Zacks #1 Rank stocks here.

Hill-Rom’s long-term earnings growth rate is estimated at 11.7%. The company currently carries the same top Zacks Rank as Hologic.

Vapotherm’s long-term earnings growth rate is anticipated at 49.5%. It currently holds a Zacks Rank of 2.

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