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Hologic, Inc. (HOLX - Free Report) reported fourth-quarter fiscal 2020 adjusted earnings per share (EPS) of $2.07, up 218.5% year over year. Moreover, the bottom line surpassed the Zacks Consensus Estimate by 69.7%.
The adjustments include charges and benefits related to amortization of acquired intangible assets, MDR expenses and non-income-tax settlement adjustment to name a few.
The company’s GAAP EPS was $1.88, up from the loss per share of 46 cents in the year-ago period.
Full-year adjusted EPS was $3.98, reflecting a 63.8% surge from the year-earlier $2.43. Again, the metric surpassed the Zacks Consensus Estimate by 26.8%.
Full-year GAAP EPS was $4.21, up from the year-earlier loss of 76 cents per share.
Revenues in Detail
Revenues grossed $1.35 billion in the reported quarter, up 55.6% year over year (up 54.2% at constant exchange rate or CER), including revenues from the divested Medical Aesthetics business in the year-ago period. The metric exceeded the Zacks Consensus Estimate by 7.7%.
Excluding the divested Blood Screening and Medical Aesthetics businesses, total revenues were $1.34 billion, up 73.3% year over year and 71.7% at CER. This primarily resulted from robust sales of tests related to COVID-19.
Organic revenues (excluding divestitures and the acquired SuperSonic Imagine or SSI business) of $1.33 billion increased 72.5% year over year and 70.9% at CER.
U.S. revenues of $994.9 million rose 51.6%, whereas international revenues of $352.1 million improved 68% year over year or 62.1% at CER.
Organically, revenues in the United States rose 64% year over year to $985 million in the quarter. International revenues were up 102.2% year over year (up 95% at CER) to $346.8 million.
Full-year revenues were $3.78 billion, reflecting a 12.1% increase from the year-ago period. Organic revenue growth for the year was 22%. Revenues surpassed the Zacks Consensus Estimate by 4.4%.
Revenues at the Diagnostics segment rose 206.1% year over year (up 202.8% at CER) to $939 million in the quarter under review, with Molecular Diagnostics being the major driver. Molecular Diagnostics’ revenues of $818.9 million climbed 375.8% (up 370.8% at CER), continuing the division’s strong performance. However, Blood Screening revenues of $8.7 million fell 47.9% year over year (down 48.2% at CER).
Revenues at the Breast Health segment declined 15.6% from the year-ago period (down 16.2% at CER) to $289.2 million. This primarily resulted from adverse impacts on demand for this segment’s products due to customers’ focus on responding to the pandemic, delayed or reduced purchases of capital equipment and rescheduled routine screening appointments. However, consumables and service revenues are gradually recovering and the flat interventional business was aided by the relaunch of the Brevera biopsy system late in the quarter. These developments cushioned the overall segmental decline.
Domestic sales were dismal in this segment in the quarter, with a 16.1% revenue decline year over year and 16.4% drop without SSI. Further, outside the United States, Breast Health sales decreased 13.6% in total and fell 21.1% without SSI.
Revenues at the GYN Surgical business fell 12.5% year over year (down 12.9% at CER) to $100.2 million, while revenues at Skeletal Health dropped 25.6% year over year (down 26.3% at CER) to $18.6 million.
Notably, Hologic no longer reports for the Medical Aesthetics segment post the divestiture of Cynosure Medical Aesthetics business on Dec 30, 2019.
Operational Update
In fiscal fourth quarter, the company-reported adjusted gross margin expanded 1,250 basis points to 74.2%. According to the company, the benefits resulted from sales of SARS-CoV-2 tests and the divestiture of the lower-margin Medical Aesthetics business.
Adjusted operating expenses amounted to $276.6 million, down 1% year over year. However, the company-reported adjusted operating margin expanded 2,430 basis points to 53.7%.
Financial Update
Hologic exited fiscal 2020 with cash and cash equivalents of $701 million compared with $601.8 million at the end of fiscal 2019. Total long-term debt (including current portion) was $3.04 billion at the end of fiscal 2020 compared with $3.06 billion at the end of fiscal 2019.
Cumulative net cash provided by operating activities at the end of fiscal 2020 was $896.6 million compared with $649.5 million a year ago.
Guidance
Hologic, boosted by the strength in its COVID-19 tests and the ongoing recovery of its other divisions, has provided the financial guidance for first-quarter fiscal 2021.
The company projects revenues within $1.35-$1.43 billion (projection of 58.7-67.6% growth rate). The growth rate is projected in the range of 56.6-65.4% at CER and within 71.1-80.8% organically. The Zacks Consensus Estimate for first-quarter fiscal 2021 revenues is pegged at $1.10 billion.
GAAP EPS is estimated within $1.88-$2.03, which projects growth of 31.5-42%.
The adjusted EPS is estimated within $2.10-$2.25, with projected growth of 244.3-268.9%. The Zacks Consensus Estimate for first-quarter fiscal 2021 EPS is pegged at $1.18.
Our Take
Hologic exited fiscal fourth quarter with better-than-expected results. The robust bottom and top-line growth amid the pandemic-led business disruptions is encouraging. Rise in organic revenues is impressive as well. Growth in Diagnostic revenues, led by a stupendous improvement in the company’s Molecular Diagnostics revenues, buoys optimism. Robust demand for the company’s COVID-19 related products and ongoing recovery in other segments have enabled the company to provide fiscal first-quarter guidance, which instills confidence in investors. Expansion of both margins looks encouraging.
On the flip side, fall in its other segments’ revenues due to the pandemic is worrying.
Zacks Rank and Other Key Picks
Hologic currently carries a Zacks Rank #2 (Buy).
A few other top-ranked stocks in the broader medical space are West Pharmaceutical Services, Inc. (WST - Free Report) , Thermo Fisher Scientific Inc. (TMO - Free Report) and Align Technology, Inc. (ALGN - Free Report) .
West Pharmaceutical reported third-quarter 2020 adjusted EPS of $1.15, beating the Zacks Consensus Estimate by 13.9%. Net revenues of $548 million outpaced the consensus estimate by 7.2%. It currently carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Thermo Fisher, a Zacks Rank #2 company, reported third-quarter 2020 adjusted EPS of $5.63, beating the Zacks Consensus Estimate by 28.8%. Revenues of $8.52 billion outpaced the consensus mark by 10%.
Align Technology reported third-quarter 2020 adjusted EPS of $2.25, surpassing the Zacks Consensus Estimate by a stupendous 281.4%. Net revenues of $734.1 million exceeded the Zacks Consensus Estimate by 38%. It currently flaunts a Zacks Rank #1.
These Stocks Are Poised to Soar Past the Pandemic
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Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.
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Hologic (HOLX) Q4 Earnings Surpass Estimates, Margins Rise
Hologic, Inc. (HOLX - Free Report) reported fourth-quarter fiscal 2020 adjusted earnings per share (EPS) of $2.07, up 218.5% year over year. Moreover, the bottom line surpassed the Zacks Consensus Estimate by 69.7%.
The adjustments include charges and benefits related to amortization of acquired intangible assets, MDR expenses and non-income-tax settlement adjustment to name a few.
The company’s GAAP EPS was $1.88, up from the loss per share of 46 cents in the year-ago period.
Full-year adjusted EPS was $3.98, reflecting a 63.8% surge from the year-earlier $2.43. Again, the metric surpassed the Zacks Consensus Estimate by 26.8%.
Full-year GAAP EPS was $4.21, up from the year-earlier loss of 76 cents per share.
Revenues in Detail
Revenues grossed $1.35 billion in the reported quarter, up 55.6% year over year (up 54.2% at constant exchange rate or CER), including revenues from the divested Medical Aesthetics business in the year-ago period. The metric exceeded the Zacks Consensus Estimate by 7.7%.
Excluding the divested Blood Screening and Medical Aesthetics businesses, total revenues were $1.34 billion, up 73.3% year over year and 71.7% at CER. This primarily resulted from robust sales of tests related to COVID-19.
Organic revenues (excluding divestitures and the acquired SuperSonic Imagine or SSI business) of $1.33 billion increased 72.5% year over year and 70.9% at CER.
U.S. revenues of $994.9 million rose 51.6%, whereas international revenues of $352.1 million improved 68% year over year or 62.1% at CER.
Organically, revenues in the United States rose 64% year over year to $985 million in the quarter. International revenues were up 102.2% year over year (up 95% at CER) to $346.8 million.
Full-year revenues were $3.78 billion, reflecting a 12.1% increase from the year-ago period. Organic revenue growth for the year was 22%. Revenues surpassed the Zacks Consensus Estimate by 4.4%.
Hologic, Inc. Price, Consensus and EPS Surprise
Hologic, Inc. price-consensus-eps-surprise-chart | Hologic, Inc. Quote
Segments in Detail
Revenues at the Diagnostics segment rose 206.1% year over year (up 202.8% at CER) to $939 million in the quarter under review, with Molecular Diagnostics being the major driver. Molecular Diagnostics’ revenues of $818.9 million climbed 375.8% (up 370.8% at CER), continuing the division’s strong performance. However, Blood Screening revenues of $8.7 million fell 47.9% year over year (down 48.2% at CER).
Revenues at the Breast Health segment declined 15.6% from the year-ago period (down 16.2% at CER) to $289.2 million. This primarily resulted from adverse impacts on demand for this segment’s products due to customers’ focus on responding to the pandemic, delayed or reduced purchases of capital equipment and rescheduled routine screening appointments. However, consumables and service revenues are gradually recovering and the flat interventional business was aided by the relaunch of the Brevera biopsy system late in the quarter. These developments cushioned the overall segmental decline.
Domestic sales were dismal in this segment in the quarter, with a 16.1% revenue decline year over year and 16.4% drop without SSI. Further, outside the United States, Breast Health sales decreased 13.6% in total and fell 21.1% without SSI.
Revenues at the GYN Surgical business fell 12.5% year over year (down 12.9% at CER) to $100.2 million, while revenues at Skeletal Health dropped 25.6% year over year (down 26.3% at CER) to $18.6 million.
Notably, Hologic no longer reports for the Medical Aesthetics segment post the divestiture of Cynosure Medical Aesthetics business on Dec 30, 2019.
Operational Update
In fiscal fourth quarter, the company-reported adjusted gross margin expanded 1,250 basis points to 74.2%. According to the company, the benefits resulted from sales of SARS-CoV-2 tests and the divestiture of the lower-margin Medical Aesthetics business.
Adjusted operating expenses amounted to $276.6 million, down 1% year over year. However, the company-reported adjusted operating margin expanded 2,430 basis points to 53.7%.
Financial Update
Hologic exited fiscal 2020 with cash and cash equivalents of $701 million compared with $601.8 million at the end of fiscal 2019. Total long-term debt (including current portion) was $3.04 billion at the end of fiscal 2020 compared with $3.06 billion at the end of fiscal 2019.
Cumulative net cash provided by operating activities at the end of fiscal 2020 was $896.6 million compared with $649.5 million a year ago.
Guidance
Hologic, boosted by the strength in its COVID-19 tests and the ongoing recovery of its other divisions, has provided the financial guidance for first-quarter fiscal 2021.
The company projects revenues within $1.35-$1.43 billion (projection of 58.7-67.6% growth rate). The growth rate is projected in the range of 56.6-65.4% at CER and within 71.1-80.8% organically. The Zacks Consensus Estimate for first-quarter fiscal 2021 revenues is pegged at $1.10 billion.
GAAP EPS is estimated within $1.88-$2.03, which projects growth of 31.5-42%.
The adjusted EPS is estimated within $2.10-$2.25, with projected growth of 244.3-268.9%. The Zacks Consensus Estimate for first-quarter fiscal 2021 EPS is pegged at $1.18.
Our Take
Hologic exited fiscal fourth quarter with better-than-expected results. The robust bottom and top-line growth amid the pandemic-led business disruptions is encouraging. Rise in organic revenues is impressive as well. Growth in Diagnostic revenues, led by a stupendous improvement in the company’s Molecular Diagnostics revenues, buoys optimism. Robust demand for the company’s COVID-19 related products and ongoing recovery in other segments have enabled the company to provide fiscal first-quarter guidance, which instills confidence in investors. Expansion of both margins looks encouraging.
On the flip side, fall in its other segments’ revenues due to the pandemic is worrying.
Zacks Rank and Other Key Picks
Hologic currently carries a Zacks Rank #2 (Buy).
A few other top-ranked stocks in the broader medical space are West Pharmaceutical Services, Inc. (WST - Free Report) , Thermo Fisher Scientific Inc. (TMO - Free Report) and Align Technology, Inc. (ALGN - Free Report) .
West Pharmaceutical reported third-quarter 2020 adjusted EPS of $1.15, beating the Zacks Consensus Estimate by 13.9%. Net revenues of $548 million outpaced the consensus estimate by 7.2%. It currently carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Thermo Fisher, a Zacks Rank #2 company, reported third-quarter 2020 adjusted EPS of $5.63, beating the Zacks Consensus Estimate by 28.8%. Revenues of $8.52 billion outpaced the consensus mark by 10%.
Align Technology reported third-quarter 2020 adjusted EPS of $2.25, surpassing the Zacks Consensus Estimate by a stupendous 281.4%. Net revenues of $734.1 million exceeded the Zacks Consensus Estimate by 38%. It currently flaunts a Zacks Rank #1.
These Stocks Are Poised to Soar Past the Pandemic
The COVID-19 outbreak has shifted consumer behavior dramatically, and a handful of high-tech companies have stepped up to keep America running. Right now, investors in these companies have a shot at serious profits. For example, Zoom jumped 108.5% in less than 4 months while most other stocks were sinking.
Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.
See the 5 high-tech stocks now>>