Hologic's 3Q profits slip 11 percent despite sales growth

by Brendon Nafziger, DOTmed News Associate Editor | August 04, 2010
The Bedford, Mass.-based women's health equipment company earned $27.4 million, or 10 cents a share, in the third quarter against $30.8 million, or 12 cents a share, this time last year.

Excluding costs of adopting new accounting standards and transaction costs for purchasing Sentinelle Medical, which makes MRI parts, last month the company said it had third quarter profits of $78.2 million, or 30 cents a share, one penny higher than most Wall Street estimates, which generally exclude one-time costs.

Hologic Inc.'s stock surged after the announcement and continued to rise 6.2 percent to reach $15.49 on Nasdaq during morning trading.

The company's two back-to-back growth quarters of growth might indicate post-recession stabilization, the Wall Street Journal reported.

Revenues reached $420.7 million, up 4.4 percent over last year's $403.1 million, buoyed by an 8.3 percent increase in breast health-related business. Gynecological surgery revenues also rose $5.7 million, or 8.7 percent, over last year at this time.

However, Hologic said these gains were partly offset by a slump of 1.5 percent in diagnostics revenues as sales of Thin Prep declined, as well as a 2.1 percent drop in skeletal health revenues.

"We are encouraged by our performance for the third quarter of fiscal 2010, even in the face of continued challenges resulting from a weak economy both domestically and internationally," said Hologic's CEO and president Rob Cascella in a statement.

Hologic, along with some analysts, is hoping a new 3D mammography system, up for U.S. Food and Drug Administration review in September, will help further lift its sales, should it get approved.