Dive Brief:
- Hologic's first-quarter sales are set to comfortably beat its guidance, with strong demand for COVID-19 tests helping the company on Sunday to post preliminary revenues of almost $1.5 billion.
- The figure, which tops the $1.1 billion forecast by Hologic, reflects rising coronavirus test sales and year-on-year growth in all the other businesses. Hologic posted the ex-COVID-19 growth despite the spread of the omicron variant affecting elective surgeries in the final days of the quarter.
- Analysts at BTIG said the results are "encouraging" in light of investor concerns about the impact of omicron, although, with Hologic's quarter ending on Dec. 25, it is possible the impact of the variant will become more apparent in the next set of financial results. Hologic's stock price was up over 2% when the market opened Monday.
Dive Insight:
The current quarterly reporting period looks to be a good one for developers of COVID-19 tests. Quidel set the tone last week, when it reported that $510 million in COVID-19 test revenues brought its preliminary first-quarter sales in at more than 35% above the consensus estimate of analysts.
Hologic provided another data point days later. As happened for Quidel, diagnostics sales are set to come in below the bumper figure achieved in the corresponding period of the prior year, when COVID-19 tests alone generated around $745 million, but rise sequentially to top internal and analyst expectations.
Total diagnostics sales are set to hit $950 million, down on the $1.1 billion reported a year ago but up on the $837 million the unit generated in the prior quarter of 2021. Excluding acquisitions and COVID-19 tests, Hologic's diagnostics unit brought in $321 million, up 10% year on year.
Hologic has yet to break out the contribution of COVID-19 tests but the available data has given analysts at BTIG a feel for how results will compare to expectations.
"We expected [Hologic] to deliver strong COVID testing sales for FY1Q22 with sales of $472M, which may prove low but well ahead of [Hologic's] FY22 guidance of at least $300M," the analysts wrote in a Sunday note to investors.
The $300 million full-year forecast — $200 million of which was predicted to arrive in the first quarter — is the product of Hologic's decision to take a conservative approach to COVID-19 expectations in light of the potential for demand to soar and crash. Hologic easily beat its COVID-19 sales forecast in the fourth quarter, with revenues coming in almost $300 million above the bottom end of its forecast range.
In the first quarter, all Hologic's other units — breast, gynecological and skeletal — grew by between 8% and 10%. Hologic CEO Steve MacMillan in a statement said the three units "showed strength" in the quarter.
Excluding COVID-19 sales, Hologic's revenues grew 9% year on year.
