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Hologic Reports 3 Percent Rise in Q4 Revenues, Strong EPS Growth

NEW YORK (GenomeWeb) – Hologic reported after the close of the market on Wednesday that its fourth quarter revenues rose 3 percent, driven by strong growth in sales within its gynecology surgical and molecular diagnostics businesses.

For the three months ended September 30, the firm reported revenues of $726.8 million up from $702.8 million a year ago, and beating the average consensus Wall Street estimate of $721.7 million. On a constant-currency basis, revenues increased 4 percent year over year.

"Our surgical business again set the pace, with its seventh straight quarter of double-digit growth globally," Hologic President and CEO Steve MacMillan said in a conference call today to review Q4 financial results. "We are also pleased with how our breast imaging and molecular diagnostics businesses performed, and encouraged that new products began to contribute to growth."

The firm's US sales rose more than 7 percent in the quarter to $578.0 million, offsetting a 10 percent drop to $148.9 million in international sales.  

The gynecology surgical business had the biggest overall percentage gain with sales increasing 17 percent year over year to $101.5 million from $86.8 million.

Revenues from Hologic's diagnostics business were up 3 percent year over year to $311.9 million from $304.2 million.

Within that segment, molecular diagnostics sales had the greatest growth, up 9 percent to $134.3 million from $123.2 million in Q4 2015.

Molecular diagnostics sales growth was driven primarily by continued strength across Aptima women's health products on the firm's automated Panther and Tigris platforms, both in the US and internationally, the firm said. In addition, sales benefited from a royalty payment of $5.0 million.

To round out the diagnostics business, cytology and perinatal segment sales were flat at $121.0 million versus $120.8 million, and the firm's blood screening revenues dropped 6 percent to $56.6 million from $60.2 million.

Sales for the firm's breast health products grew by 2 percent to $311.9 million from $304.2 million, while sales for its skeletal health products were down 17 percent at $21.1 million from $25.5 million.

The company reported net income of $92.2 million, or $.33 per share, up from $25.2 million, or $.09 per share in Q4 2015. On an adjusted basis, Hologic reported earnings per share of $.52, up 21 percent from the prior-year quarter, and beating average analyst estimates of $.50.

The firm’s R&D costs rose 16 percent to $62.5 million from $53.8 million in Q4 2015, and its SG&A costs rose 3 percent to $171.2 million from $165.9 million.

Hologic ended the quarter with $548.4 million in cash and cash equivalents.

In Q1 2017, the firm expects revenues in the range of $720 million to $730 million and earnings per share in the range of $.26 to $.27.  

In 2017, the company expects revenues of $2.94 billion to $2.98 billion, an increase of 4 percent to 5.5 percent on a constant currency basis and 3.8 percent to 5.2 percent on a reported basis over 2016. The firm expects earnings per share for next year to be in the range of $1.23 to $1.27, an 8.5 percent to 10.6 percent increase on a constant currency basis and a 6 percent to 9.5 percent increase on a reported basis over 2016 EPS.

"As we look back on fiscal 2016, the stabilization of ThinPrep and NovaSure combined with strong growth from Genius [3D mammography exams] and Panther drove excellent full-year results," MacMillan said.

"Panther helped our molecular business grow 7.8 percent in constant currency in 2016, behind increased sales of women's health tests for chlamydia and gonorrhea, HPV, and trichomonas," he added. "By the end of fiscal 2016, we had shipped more than 1,000 Panther units just to diagnostic customers. And we're encouraged that a growing number of these placements are coming internationally. Panther shipments to customers outside the United States grew dramatically in 2016, and we believe we are just scratching the surface of this long-term opportunity."

Hologic’s shares were up around 3 percent to $36.50 in after-hours trading on the Nasdaq.

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