Hologic Reports Q4 Loss, Issues Q1, FY13 Guidance Below Estimates (HOLX)

Following a downgrade by “The Street Ratings”, the share price of medical equipment manufacturer Hologic (NASDAQ: HOLX) declined at the opening of the trading session yesterday but retraced all the losses after noon. The company reported a fiscal 2012 fourth-quarter net loss after the market closed on Monday. Hologic also issued fiscal 2013 first-quarter and full-year guidance below analysts’ estimates.

The Massachusetts-based company manufactures medical imaging systems, diagnostics and surgical products for the healthcare needs of women.

Total revenue for the fiscal 2012 fourth quarter increased to $588.55 million from $467.05 million in the similar period last year.

Excluding the effect of a purchase accounting adjustment, non-GAAP adjusted revenues increased 28.5% to $600.2 million from $467.0 million in the fourth quarter of fiscal 2011. The revenue estimate of analysts was $581.62 million for the fourth quarter of 2012.

The net loss for the reported quarter was $77.77 million, or $0.29 per share, compared to a net profit of $27.57 million, or $0.10 per share, in the comparable period of fiscal 2011 fourth quarter.

Non-GAAP adjusted net income for the fourth quarter of fiscal 2012 increased 10.8% to $98.33 million, or $0.37 per share, from $88.79 million, or $0.34 per share, in the prior year’s fourth quarter. The earnings estimate of analysts was $0.37 for the fourth quarter.

Total revenue for fiscal 2012 increased to $2.0 billion from $1.79 billion in the prior-year similar period.

The net loss for fiscal 2012 was $73.63 million, or $0.28 per share, compared to a net profit of $157.15 million, or $0.59 per share, in fiscal 2011.

Non-GAAP adjusted net income for fiscal 2012 increased 9.6% to $367.8 million, or $1.38 per share, from $335.5 million, or $1.27 per share, for the corresponding period last year. The earnings estimate of analysts was $1.38 per share for the fiscal 2012.

After reporting a net loss in the second quarter of fiscal 2012, the share price of Hologic, which was trading around $21.00 during the first four months of this year, had a steep fall to $19.12. The share price continued its slide to $17.01 in the first week of May 2012, following a downgrade by “The Street Ratings” from “buy” to “hold”. The share price reversed the downward trend on June 20 to attain $18.07 after Hologic announced that it is a step closer to concluding the $3.76 billion acquisition of diagnostic test maker Gen-Probe. The fiscal 2012 third-quarter earnings that beat estimates, as well as an upgrade by “The Street Ratings” to “buy” from “hold”, escalated the share price to $20.18 on September 7. On October 1, the National Traders Association initiated a new coverage of Hologic. This report triggered another rally at Hologic’s counter, resulting in a share price of $20.32 in the first week of October. Yesterday, before the market opened, “The Street Ratings” downgraded the stock from “buy” to “hold”, considering the unimpressive growth in net income and weak operating cash flow. Neglecting the downgrade, the stock opened on a positive note. However, the share price was quickly pushed into the negative territory but recovered in the second half of the trading session.

Hologic expects fiscal 2013 first-quarter non-GAAP adjusted revenues in the range of $640 million to $645 million, excluding an expected purchase accounting reduction of $17 million related to the Novartis collaboration. The guidance is 35% to 36% higher than the fiscal 2012 first-quarter revenues of $472.7 million. The revenue estimate of analysts is $660.88 million for the first quarter of fiscal 2013. The company expects non-GAAP adjusted EPS of $0.37 for the first quarter of fiscal 2013. The EPS estimate of analysts is $0.40 for the first quarter of fiscal 2013.

For fiscal 2013, Hologic anticipates non-GAAP adjusted revenues between $2.61 billion and $2.64 billion, excluding an expected purchase accounting reduction of $22 million related to the Novartis collaboration. The outlook is 30% to 31% more than the fiscal 2012 non-GAAP revenues of $2.01 billion. The revenue estimate of analysts is $2.68 billion for the full year 2013. The company expects non-GAAP adjusted EPS in the range of $1.56 to $1.58 per share. The earnings estimate of analysts was $1.64 per share for the full year 2013.

Hologic ended yesterday’s trading session at $20.39 per share, up $0.07 or $0.3% on a volume of 2.37 million shares.

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Published by Duncan Oleinic

Duncan Oleinic is from New Yourk. After graduating with a degree in physics, he began his career as an analyst in a broking firm. Through this experience he was able to advance to the role of correspondent for a U.S based financial news provider, where he worked from 2001 to 2007. He subsequently joined a merchant banking firm as a financial analyst focused on valuing unlisted companies in the sub-continent. Over the course of his two years here, he performed valuations of several media companies which were later acquired by peers.

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