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Hologic Q3 Revenues Grow 12 Percent, Beating Estimates

NEW YORK (GenomeWeb) – Hologic reported after the close of the market on Wednesday that its third quarter revenues rose 12 percent year over year, crediting its molecular diagnostics and international businesses as drivers of new growth.

For the three months ended July 1, the firm reported total revenues of $806.1 million, up from $717.4 million in Q3 2016, and beating the average Wall Street analyst estimate of $799.7 million. On a constant-currency basis, revenues increased 13 percent.

The firm's product revenues grew to $674.1 million from $601.3 million a year ago, while service and other revenues increased to $132.0 million from $116.1 million.

"Hologic posted solid results in the third quarter, with revenues exceeding our guidance," Hologic Chairman and CEO Steve MacMillan said in a statement. "Our molecular diagnostics and international businesses are clearly emerging as new growth drivers, and both grew organically at a low-double-digit rate in constant currency."

Revenues from the molecular diagnostics business grew 9 percent to $144.1 million, though revenues from the total diagnostics business fell 8 percent to $284.1 million. The firm divested its Grifols blood screening business in January for $1.85 billion, which affected overall diagnostics revenues for the quarter. The company's breast health business was essentially flat at $283.7 million.

On a conference call with analysts following the release of the earnings, MacMillan said the company is "doing an effective job of filling the hole" left from the divestiture of the Grifols business with new products and the Cynosure aesthetic medical laser product line.

He also touted the 510(k) clearance Hologic recently received from the US Food and Drug Administration for its Aptima Herpes Simplex Virus 1 & 2 molecular assay on the fully automated Panther system, and the CE marking the company obtained in Europe for its new diagnostic system, the Panther Fusion. He called the former an important new addition to the Panther women's health menu and an effective way to draw customers into the Panther menu in the US, and said the latter was an indication that Hologic is building an international molecular diagnostics business to rival the one it has built in the US.

Hologic's Q3 net income fell to $59.5 million, or $.21 per share, from $84.8 million, or $.30 per share, a year earlier. On an adjusted basis, the company reported EPS of $.50, beating the analyst expectation for EPS of $.49.

The firm's Q3 R&D expenses rose 6 percent to $62.5 million from $58.8 million in the year-ago quarter, while its SG&A expenses rose 23 percent to $210.9 million from $171.5 million in Q3 2016.

Hologic ended the quarter with $588.4 million in cash and cash equivalents.

For Q4, the company is expecting revenues of $785 million to $800 million and adjusted earnings of $.48 to $.50 per share. For full-year 2017, Hologic lowered its revenue guidance to between $3.04 billion and $3.06 billion from a previous guidance of $3.05 billion to $3.08 billion. The firm raised its guidance for 2017 EPS to between $2.00 to $2.02 from a previous guidance of $1.98 to $2.02. Analysts are expecting Q4 revenues of $817.1 million and EPS of $.50, and 2017 revenues of $3.07 billion and EPS of $2.01.

MacMillan also announced that Hologic is planning to launch three new breast health products in the US — a new biopsy system, which is expected to launch by the end of the year, and two new mammography systems that have both already been launched overseas.

Hologic's shares fell nearly 3 percent to $42.55 in after-hours trading on the Nasdaq.