Hologic (NSDQ:HOLX) announced today that its revenues nearly doubled year-over-year in the first quarter of fiscal 2021.
Marlborough, Mass.-based Hologic expects to report revenues of more than approximately $1.6 billion, an increase of 89.3% from the first quarter of 2020. That tops the company’s November guidance of between $1.35 billion and $1.425 billion for the quarter ended Dec. 26, 2020, according to a news release.
“Hologic’s strong momentum continued in the first quarter of fiscal 2021 as organic revenue more than doubled, well ahead of our prior expectations,” Hologic chairman, president & CEO Steve MacMillan said in the release. “Thanks to the incredible efforts of our diagnostics team, we provided almost 30 million COVID-19 tests to global customers in the quarter. Importantly as well, our breast Health and surgical businesses showed remarkable strength, with each franchise posting growth in all major geographies – the United States, Europe and Asia-Pacific. I am so proud of how our teams are showing up for our customers around the world every day.”
The company’s general businesses have performed as usual or with slight improvements from 2020, but the diagnostics business, spurred by the company’s COVID-19 test production, has increased from revenues of $311.5 million in 2020 to $1.13 billion in 2021, marking an uptick of 262.2%.
Hologic has put the extra revenue to use, executing the acquisition of Somatex Medical Technologies GmbH and its minimally invasive devices for tumor diagnostics, biopsy and interventional specialties in breast health for $64 million, followed by the purchase of molecular diagnostic test maker Biotheranostics for approximately $230 million, all in the space of two weeks.
Needham analyst Mike Matson wrote that the massive beat should have been expected, given the increasing COVID-19 cases and the demand for testing. He added that he expects Hologic’s diagnostics growth to peak in the second quarter before the wider vaccine rollout, then the growth should slow or even turn negative as competition increases.
However, Jefferies analyst Raj Denhoy listed Hologic as a “buy,” citing that the expected decline in diagnostic revenue will not be as bad as feared and recent acquisitions made by the company are “a precursor for what’s to come,” with potentially larger deals looming on the horizon.
Hologic is trading up 4% at $81.21 per share in mid-morning trading, mirroring medtech as a whole. The industry is having a strong day, rising 1% to an all-time peak of $107.52 for MassDevice’s MedTech 100 Index — which includes stocks of the world’s largest medical device companies.
Medtech’s performance represents quite the contrast to the main markets, as the Dow Jones Industrial Average is slightly down this morning.