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Molecular Diagnostics to Aid Hologic's (HOLX) Q3 Earnings
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Hologic, Inc. (HOLX - Free Report) is slated to report third-quarter fiscal 2018 financial results on Jul 31, after the closing bell. Notably, Hologic’s earnings surpassed the Zacks Consensus Estimate in three of the past four quarters with an average beat of 4.08%.
Let’s see, how things are shaping up prior to this announcement.
Key Catalyst
The company expects the Diagnostics segment to maintain its stellar performance on the back of molecular diagnostics. In the United States, the company is likely to gain from an increasing market share, utilization of the Panther system along with market expansion by conforming to the testing guidelines.
Global growth in the molecular diagnostics can be attributed to the Panther system, Hologic’s fully automated molecular diagnostics instrument. Also, frequent utilization of Aptima women’s health assays is another catalyst.
Notably, Aptima assays have gained a huge customer base in testing for chlamydia and gonorrhea, HPV (human papillomavirus) and trichomonas. We are also hopeful about Hologic’s expanded market for sexually transmitted disease testing.
In April, the company announced the premarket approval (PMA) for the ThinPrep Integrated Imager. Notably, this product is expected to expand the availability of automated imaging of Pap tests in laboratories and cytologists in the United States.
Along with ThinPrep Integrated Imager, Hologic also announced the launch of Compass Stainer in the United States.
The steady pace of domestic assay innovation fortifies the company’s position to consolidate molecular testing on the Panther system. In January, the company announced the receipt of PMA for the Aptima HBV Quant Assay for quantitation of hepatitis B viral load on the fully automated Panther system.
All the above developments are anticipated to contribute significantly to the company’s top line in the to-be-reported quarter.
The Zacks Consensus Estimate of $153 million for Molecular Diagnostics revenues reflects an increase of 6.3% from the year-ago quarter.
Other factors that are likely to influence Hologic’s results in the fiscal third quarter are as follows:
Hologic is optimistic about sustaining a solid earnings trend in 2018, courtesy of gains from the Breast Health segment. The company has witnessed a consistent rise in market share within Breast Health on the back of direct-to-consumer initiatives and insurance coverage.
Additionally, the company’s adoption of new mammography systems, 3Dimensions and 3D Performance, encourages us. These products have already started to leverage the company’s Genius brand and lured customers to upgrade their existing 2D systems.
In this regard, the receipt of PMA from the FDA for Clarity HD high-resolution 3D imaging and Intelligent 2D imaging technology in March is noteworthy. These products are now available in the 3Dimensions breast tomosynthesis system.
Also, the global sales of interventional breast products — mainly biopsy systems and disposables — have been rising consistently. Increase in Affirm prone table sales buoyed the company’s optimism. The company projects that the Brevera, a revolutionary new real-time biopsy system, will continue to drive growth in FY18.
Furthermore, in January 2018, Hologic obtained CE Mark for the Brevera breast biopsy system with CorLumina imaging technology, a real-time breast biopsy and verification system.
Accordingly, the Zacks Consensus Estimate for the interventional breast solutions revenues is pegged at $48.5 million, showing a rise of 7.8% from the prior-year quarter’s tally. Per the consensus estimate, Mammography/Breast Care revenues are pegged at $296 million, which reflects an increase of 4.2% from the year-ago quarter’s figure.
Management is highly optimistic about the international performance. During the second quarter of fiscal 2018, international revenues exceeded $200 million for the first time and surged 28% on strong contribution from Cynosure. This trend is expected to be reflected in the to-be-reported quarter as well.
On the flip side, Hologic faced challenges related to unfavorable foreign currency movement over the past few quarters. Escalating operating expenses and an intense competition, particularly in the tomosynthesis market, are persisting headwinds.
Overall, for third-quarter fiscal 2018, Hologic expects adjusted revenues of $795-$810 million, representing annualized decline of 1% to 2.8% at constant exchange rate.
Adjusted EPS is estimated at 55-57 cents, reflecting annualized growth of 10-14%. The Zacks Consensus Estimate for total third-quarter fiscal 2018 revenues of $800.1 million reflects a decline of 0.7% from the year-ago quarter.
What Our Model Suggests
Per the proven Zacks model, a company with a solid Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has higher chances of beating estimates if it also has a positive Earnings ESP.
Hologic has a Zacks Rank #4 (Sell) and an Earnings ESP of +0.18%. Together, the combination suggests that the company is not likely to beat estimates this quarter. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
The Zacks Consensus Estimate for earnings of 56 cents reflects a 12% rise on a year-over-year basis.
Conversely, we caution against the Sell-rated stocks (#4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks Worth a Look
Here are some medical stocks worth considering as these have the right combination of elements to post an earnings beat in the to-be-reported quarter.
Baxter International Inc (BAX - Free Report) has an Earnings ESP of +0.90% and a Zacks Rank #2.
Laboratory Corporation Of America Holdings (LH - Free Report) has an Earnings ESP of +0.48% and a Zacks Rank #3.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
Image: Bigstock
Molecular Diagnostics to Aid Hologic's (HOLX) Q3 Earnings
Hologic, Inc. (HOLX - Free Report) is slated to report third-quarter fiscal 2018 financial results on Jul 31, after the closing bell. Notably, Hologic’s earnings surpassed the Zacks Consensus Estimate in three of the past four quarters with an average beat of 4.08%.
Let’s see, how things are shaping up prior to this announcement.
Key Catalyst
The company expects the Diagnostics segment to maintain its stellar performance on the back of molecular diagnostics. In the United States, the company is likely to gain from an increasing market share, utilization of the Panther system along with market expansion by conforming to the testing guidelines.
Global growth in the molecular diagnostics can be attributed to the Panther system, Hologic’s fully automated molecular diagnostics instrument. Also, frequent utilization of Aptima women’s health assays is another catalyst.
Hologic, Inc. Price and EPS Surprise
Hologic, Inc. Price and EPS Surprise | Hologic, Inc. Quote
Notably, Aptima assays have gained a huge customer base in testing for chlamydia and gonorrhea, HPV (human papillomavirus) and trichomonas. We are also hopeful about Hologic’s expanded market for sexually transmitted disease testing.
In April, the company announced the premarket approval (PMA) for the ThinPrep Integrated Imager. Notably, this product is expected to expand the availability of automated imaging of Pap tests in laboratories and cytologists in the United States.
Along with ThinPrep Integrated Imager, Hologic also announced the launch of Compass Stainer in the United States.
The steady pace of domestic assay innovation fortifies the company’s position to consolidate molecular testing on the Panther system. In January, the company announced the receipt of PMA for the Aptima HBV Quant Assay for quantitation of hepatitis B viral load on the fully automated Panther system.
All the above developments are anticipated to contribute significantly to the company’s top line in the to-be-reported quarter.
The Zacks Consensus Estimate of $153 million for Molecular Diagnostics revenues reflects an increase of 6.3% from the year-ago quarter.
Other factors that are likely to influence Hologic’s results in the fiscal third quarter are as follows:
Hologic is optimistic about sustaining a solid earnings trend in 2018, courtesy of gains from the Breast Health segment. The company has witnessed a consistent rise in market share within Breast Health on the back of direct-to-consumer initiatives and insurance coverage.
Additionally, the company’s adoption of new mammography systems, 3Dimensions and 3D Performance, encourages us. These products have already started to leverage the company’s Genius brand and lured customers to upgrade their existing 2D systems.
In this regard, the receipt of PMA from the FDA for Clarity HD high-resolution 3D imaging and Intelligent 2D imaging technology in March is noteworthy. These products are now available in the 3Dimensions breast tomosynthesis system.
Also, the global sales of interventional breast products — mainly biopsy systems and disposables — have been rising consistently. Increase in Affirm prone table sales buoyed the company’s optimism. The company projects that the Brevera, a revolutionary new real-time biopsy system, will continue to drive growth in FY18.
Furthermore, in January 2018, Hologic obtained CE Mark for the Brevera breast biopsy system with CorLumina imaging technology, a real-time breast biopsy and verification system.
Accordingly, the Zacks Consensus Estimate for the interventional breast solutions revenues is pegged at $48.5 million, showing a rise of 7.8% from the prior-year quarter’s tally. Per the consensus estimate, Mammography/Breast Care revenues are pegged at $296 million, which reflects an increase of 4.2% from the year-ago quarter’s figure.
Management is highly optimistic about the international performance. During the second quarter of fiscal 2018, international revenues exceeded $200 million for the first time and surged 28% on strong contribution from Cynosure. This trend is expected to be reflected in the to-be-reported quarter as well.
On the flip side, Hologic faced challenges related to unfavorable foreign currency movement over the past few quarters. Escalating operating expenses and an intense competition, particularly in the tomosynthesis market, are persisting headwinds.
Overall, for third-quarter fiscal 2018, Hologic expects adjusted revenues of $795-$810 million, representing annualized decline of 1% to 2.8% at constant exchange rate.
Adjusted EPS is estimated at 55-57 cents, reflecting annualized growth of 10-14%. The Zacks Consensus Estimate for total third-quarter fiscal 2018 revenues of $800.1 million reflects a decline of 0.7% from the year-ago quarter.
What Our Model Suggests
Per the proven Zacks model, a company with a solid Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has higher chances of beating estimates if it also has a positive Earnings ESP.
Hologic has a Zacks Rank #4 (Sell) and an Earnings ESP of +0.18%. Together, the combination suggests that the company is not likely to beat estimates this quarter. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
The Zacks Consensus Estimate for earnings of 56 cents reflects a 12% rise on a year-over-year basis.
Conversely, we caution against the Sell-rated stocks (#4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks Worth a Look
Here are some medical stocks worth considering as these have the right combination of elements to post an earnings beat in the to-be-reported quarter.
Align Technology, Inc. (ALGN - Free Report) sports a Zacks Rank #1 and has an Earnings ESP of +2.05%. You can see the complete list of today’s Zacks #1 Rank stocks here.
Baxter International Inc (BAX - Free Report) has an Earnings ESP of +0.90% and a Zacks Rank #2.
Laboratory Corporation Of America Holdings (LH - Free Report) has an Earnings ESP of +0.48% and a Zacks Rank #3.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot trades we're targeting>>