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Hologic (HOLX) Q4 Earnings Beat Estimates, Margins Down
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Hologic, Inc. (HOLX - Free Report) reported fourth-quarter fiscal 2022 adjusted earnings per share (EPS) of 82 cents, down 49.1% year over year. However, the bottom line surpassed the Zacks Consensus Estimate by 32.3%.
The adjustments include charges and benefits related to the amortization of acquired intangible assets, certain asset impairment charges and restructuring and integration/consolidation costs among others.
The company’s GAAP EPS was 47 cents in the quarter compared with the year-ago quarter’s EPS of $1.28, reflecting a 63.3% plunge.
Full-fiscal adjusted EPS was $6.02, a 28.4% decline from fiscal 2021.
Revenues in Detail
Revenues totaled $953.3 million in the reported quarter, down 27.6% year over year (down 25.6% at the constant exchange rate or CER). The metric however surpassed the Zacks Consensus Estimate by 9.9%. Lower sales of COVID-19 assays and supply chain challenges related to semiconductor chips in the Breast Health business dragged the top line down.
Fiscal 2022 revenues were $4.86 billion, a 13.7% decline from fiscal 2021.
Segments in Detail
Fiscal fourth quarter U.S. revenues of $728.6 million declined 23.4%, whereas international revenues of 224.7 million dropped 38.6% year over year or 31.3% at CER.
Revenues at the Diagnostics segment declined 37.8% year over year (down 35.6% at CER) to $520.9 million in the quarter under review. Excluding COVID-19 revenues, Diagnostics revenues grew 7.8% on a reported basis and 11.1% at CER.
Cytology & Perinatal revenues of $112.8 million were up 1.5% at CER. Molecular Diagnostics revenues of $400.2 million declined 41.3% at CER. Blood Screening revenues of $7.9 million fell 51.5% year over year at CER.
Revenues in the Breast Health segment fell 17.7% from the year-ago period (down 16% at CER) to $275.1 million. This primarily resulted from lower gantry revenues due to semiconductor chip shortages. Further, outside the United States, Breast Health sales declined 15.6% at CER.
Revenues at the GYN Surgical business rose 9.3% year over year (up 11.4% at CER) to $133.3 million, led by improved procedure volume as COVID prevalence declined.
Revenues at Skeletal Health improved 1.7% year over year (up 3.7% at CER) to $24 million.
Operational Update
In the fiscal fourth quarter, the company-provided adjusted gross margin contracted 690 basis points (bps) to 62.5%. According to the company, the decrease in gross margin was primarily due to a year-over-year decline in COVID-19 assay sales and lower capital equipment sales due to supply chain challenges related to semiconductor chip shortages, which impacted its Breast Health business.
The company’s adjusted operating margin was 27.9%, down 1460 bps.
Financial Update
Hologic ended fiscal 2022 with cash and cash equivalents of $2.34 billion compared with $2.38 billion at the end of the fiscal third quarter of 2022. Total long-term debt (including the current portion) was $2.82 billion at the end of fiscal 2022, unchanged from the end of the third quarter of 2022.
Net cash provided by operating activities at the end of fiscal 2022 was $2.13 billion compared with $2.33 billion a year ago.
Guidance
Hologic issued the guidance for the first quarter and fiscal 2023.
For fiscal 2023, the company projects revenues within $3.70-3.90 billion, suggesting a year-over-year decline in the range of 19.8-23.9% on a reported basis, 18-22.1% at CER and 17.9-22% organically. The Zacks Consensus Estimate for fiscal 2023 revenues is pegged at $3.79 billion.
Adjusted earnings per share for fiscal 2023 are estimated within $3.30-$3.60, with a projected decline of 64.1-69.2% year over year. The Zacks Consensus Estimate for fiscal 2023 earnings per share is pegged at $3.47.
For first-quarter fiscal 2023, the company projects revenues within $940-$990 million, suggesting a year-over-year decline in the range of 32.7-36.1% on a reported basis, 30.5-33.9% at CER and 30.8-34.2% organically. The Zacks Consensus Estimate for first-quarter fiscal 2023 revenues is pegged at $921.4 million.
Adjusted earnings per share for the quarter are estimated within 80-90 cents, suggesting a decline of 58.5-63.1% year over year. The Zacks Consensus Estimate for first-quarter fiscal 2023 earnings per share is pegged at 79 cents.
Our Take
Hologic delivered better-than-expected revenues and earnings for the fourth quarter of fiscal 2022. However, on a year-over-year basis, both the figures were significantly down. The significant decline in COVID-19 assay revenues, along with supply chain challenges related to semiconductor chips in the Breast Health business, dragged total revenues down. The company also reported a contraction in both margins.
On a positive note, GYN Surgical business grew nearly 9% organically as the company registered procedural volumes return as well as acceleration from the new business lines.
Zacks Rank and Key Picks
Hologic currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader medical space that have announced quarterly results are Elevance Health Inc. (ELV - Free Report) , Medpace Holdings, Inc. (MEDP - Free Report) and Merit Medical Systems, Inc. (MMSI - Free Report) .
Elevance Health, carrying a Zacks Rank #2 (Buy), reported third-quarter 2022 adjusted EPS of $7.53, which beat the Zacks Consensus Estimate by 6.1%. Revenues of $39.63 billion outpaced the consensus mark by 1.3%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Elevance Health has an estimated long-term growth rate of 12%. ELV’s earnings surpassed estimates in all the trailing four quarters, the average being 4.1%.
Medpace Holdings, sporting a Zacks Rank #1, reported third-quarter 2022 EPS of $2.05, which beat the Zacks Consensus Estimate by 39.5%. Revenues of $383.7 million outpaced the consensus mark by 8.1%.
Medpace Holdings has an estimated growth rate of 44.9% for the full-year 2022. MEDP’s earnings surpassed estimates in all the trailing four quarters, the average being 22%.
Merit Medical, flaunting a Zacks Rank #1, reported third-quarter 2022 adjusted EPS of 64 cents, which beat the Zacks Consensus Estimate by 20.8%. Revenues of $287.2 million outpaced the consensus mark by 5.2%.
Merit Medical has an estimated long-term growth rate of 11%. MMSI’s earnings surpassed estimates in all the trailing four quarters, the average being 25.4%.
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Hologic (HOLX) Q4 Earnings Beat Estimates, Margins Down
Hologic, Inc. (HOLX - Free Report) reported fourth-quarter fiscal 2022 adjusted earnings per share (EPS) of 82 cents, down 49.1% year over year. However, the bottom line surpassed the Zacks Consensus Estimate by 32.3%.
The adjustments include charges and benefits related to the amortization of acquired intangible assets, certain asset impairment charges and restructuring and integration/consolidation costs among others.
The company’s GAAP EPS was 47 cents in the quarter compared with the year-ago quarter’s EPS of $1.28, reflecting a 63.3% plunge.
Full-fiscal adjusted EPS was $6.02, a 28.4% decline from fiscal 2021.
Revenues in Detail
Revenues totaled $953.3 million in the reported quarter, down 27.6% year over year (down 25.6% at the constant exchange rate or CER). The metric however surpassed the Zacks Consensus Estimate by 9.9%. Lower sales of COVID-19 assays and supply chain challenges related to semiconductor chips in the Breast Health business dragged the top line down.
Fiscal 2022 revenues were $4.86 billion, a 13.7% decline from fiscal 2021.
Segments in Detail
Fiscal fourth quarter U.S. revenues of $728.6 million declined 23.4%, whereas international revenues of 224.7 million dropped 38.6% year over year or 31.3% at CER.
Revenues at the Diagnostics segment declined 37.8% year over year (down 35.6% at CER) to $520.9 million in the quarter under review. Excluding COVID-19 revenues, Diagnostics revenues grew 7.8% on a reported basis and 11.1% at CER.
Hologic, Inc. Price, Consensus and EPS Surprise
Hologic, Inc. price-consensus-eps-surprise-chart | Hologic, Inc. Quote
Cytology & Perinatal revenues of $112.8 million were up 1.5% at CER. Molecular Diagnostics revenues of $400.2 million declined 41.3% at CER. Blood Screening revenues of $7.9 million fell 51.5% year over year at CER.
Revenues in the Breast Health segment fell 17.7% from the year-ago period (down 16% at CER) to $275.1 million. This primarily resulted from lower gantry revenues due to semiconductor chip shortages. Further, outside the United States, Breast Health sales declined 15.6% at CER.
Revenues at the GYN Surgical business rose 9.3% year over year (up 11.4% at CER) to $133.3 million, led by improved procedure volume as COVID prevalence declined.
Revenues at Skeletal Health improved 1.7% year over year (up 3.7% at CER) to $24 million.
Operational Update
In the fiscal fourth quarter, the company-provided adjusted gross margin contracted 690 basis points (bps) to 62.5%. According to the company, the decrease in gross margin was primarily due to a year-over-year decline in COVID-19 assay sales and lower capital equipment sales due to supply chain challenges related to semiconductor chip shortages, which impacted its Breast Health business.
The company’s adjusted operating margin was 27.9%, down 1460 bps.
Financial Update
Hologic ended fiscal 2022 with cash and cash equivalents of $2.34 billion compared with $2.38 billion at the end of the fiscal third quarter of 2022. Total long-term debt (including the current portion) was $2.82 billion at the end of fiscal 2022, unchanged from the end of the third quarter of 2022.
Net cash provided by operating activities at the end of fiscal 2022 was $2.13 billion compared with $2.33 billion a year ago.
Guidance
Hologic issued the guidance for the first quarter and fiscal 2023.
For fiscal 2023, the company projects revenues within $3.70-3.90 billion, suggesting a year-over-year decline in the range of 19.8-23.9% on a reported basis, 18-22.1% at CER and 17.9-22% organically. The Zacks Consensus Estimate for fiscal 2023 revenues is pegged at $3.79 billion.
Adjusted earnings per share for fiscal 2023 are estimated within $3.30-$3.60, with a projected decline of 64.1-69.2% year over year. The Zacks Consensus Estimate for fiscal 2023 earnings per share is pegged at $3.47.
For first-quarter fiscal 2023, the company projects revenues within $940-$990 million, suggesting a year-over-year decline in the range of 32.7-36.1% on a reported basis, 30.5-33.9% at CER and 30.8-34.2% organically. The Zacks Consensus Estimate for first-quarter fiscal 2023 revenues is pegged at $921.4 million.
Adjusted earnings per share for the quarter are estimated within 80-90 cents, suggesting a decline of 58.5-63.1% year over year. The Zacks Consensus Estimate for first-quarter fiscal 2023 earnings per share is pegged at 79 cents.
Our Take
Hologic delivered better-than-expected revenues and earnings for the fourth quarter of fiscal 2022. However, on a year-over-year basis, both the figures were significantly down. The significant decline in COVID-19 assay revenues, along with supply chain challenges related to semiconductor chips in the Breast Health business, dragged total revenues down. The company also reported a contraction in both margins.
On a positive note, GYN Surgical business grew nearly 9% organically as the company registered procedural volumes return as well as acceleration from the new business lines.
Zacks Rank and Key Picks
Hologic currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader medical space that have announced quarterly results are Elevance Health Inc. (ELV - Free Report) , Medpace Holdings, Inc. (MEDP - Free Report) and Merit Medical Systems, Inc. (MMSI - Free Report) .
Elevance Health, carrying a Zacks Rank #2 (Buy), reported third-quarter 2022 adjusted EPS of $7.53, which beat the Zacks Consensus Estimate by 6.1%. Revenues of $39.63 billion outpaced the consensus mark by 1.3%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Elevance Health has an estimated long-term growth rate of 12%. ELV’s earnings surpassed estimates in all the trailing four quarters, the average being 4.1%.
Medpace Holdings, sporting a Zacks Rank #1, reported third-quarter 2022 EPS of $2.05, which beat the Zacks Consensus Estimate by 39.5%. Revenues of $383.7 million outpaced the consensus mark by 8.1%.
Medpace Holdings has an estimated growth rate of 44.9% for the full-year 2022. MEDP’s earnings surpassed estimates in all the trailing four quarters, the average being 22%.
Merit Medical, flaunting a Zacks Rank #1, reported third-quarter 2022 adjusted EPS of 64 cents, which beat the Zacks Consensus Estimate by 20.8%. Revenues of $287.2 million outpaced the consensus mark by 5.2%.
Merit Medical has an estimated long-term growth rate of 11%. MMSI’s earnings surpassed estimates in all the trailing four quarters, the average being 25.4%.