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Hologic Replaces CEO, Pre-announces Q3 Revenues at Low End of Guidance

NEW YORK (GenomeWeb News) – Hologic said after the close of the market on Thursday that Jack Cumming is replacing Rob Cascella as president and CEO of the firm, effective immediately.

The company also pre-announced third-quarter revenues of $626 million and non-GAAP adjusted EPS of $.38.

In its announcement, Hologic said that Cascella is leaving the firm for "personal reasons" but will serve as an advisor to the company through November.

For Cumming, it will be his second go-round as CEO of the company. He previously headed Hologic between 2001 and 2009.

"As CEO, [Cumming] will undertake a full assessment of our businesses, review the progress of our integration efforts, carefully evaluate our capital allocation strategy and capital return policies, and facilitate greater transparency throughout the company," Hologic Chairman David LaVance said in a statement. "The board is confident Jack will successfully lead our team to enhance performance, drive growth, and increase shareholder value."

While the CEO change was unexpected, some analysts said that discontent had been brewing among Hologic investors, which may have necessitated the change.

"Over the past several weeks, the investment community seemed increasingly abuzz regarding the potential for activist involvement with Hologic and the potential for a change in" top-level management, Cowen & Co. analyst Doug Schenkel said today in a research note.

In his first stint as CEO, Cumming oversaw many of Hologic's acquisitions — including its purchase of Third Wave in 2008 — some of which have been viewed as drags on Hologic's business.

"Given mixed success from some of the acquisitions under Mr. Cumming's initial tenure as CEO … we are surprised he is returning to run the company," Piper Jaffray's William Quirk said.

Ross Muken of the ISI Group said, however, that under Cumming's leadership, Hologic "drove the successful adoption of 2D Tomo, and his appointment as CEO should answer some of the recent calls for change at the company."

Hologic on Thursday also pre-announced revenues and non-GAAP EPS for its fiscal third quarter.

The revenue figure of $626 million is at the low end of guidance that the company gave in May during its second-quarter earnings announcement. At the time, Hologic said revenues were expected to be between $625 million and $630 million. The $626 million figure would also narrowly miss the consensus Wall Street estimate of $626.8 million.

The $.38 EPS figure would beat guidance provided in May of between $.36 and $.37, as well as the average Wall Street estimate of $.37.

Hologic is scheduled to release its earnings after the close of the market on Aug. 5.

In morning trading today on the Nasdaq, shares of Hologic were up 7 percent to $21.40.