Massachusetts women’s health company Hologic (NSDQ:HOLX) this week released a quarterly and full-year earnings report that beat analysts’ expectations, but a hefty $1.1 billion impairment charge devastated the device maker’s bottom line.
Overall, sales were up 5.7% during the 4th quarter and 24.7% for the full year, according to company filings. Losses widened by 1332.4% in Q4 and by 1492.8% in 2013.
The impairment charge, which constituted nearly all of the company’s losses for the quarter, was a result of recalculated goodwill for Hologic’s diagnostics business, the company said.
"Based on the combination of factors, including a full reevaluation of the company’s existing product development efforts and cost structure, as well as a change in revenue forecast, we determined a portion of goodwill was impaired," Hologic CFO and finance & administration executive vice president Glenn Muir said during the company’s quarterly conference call. "The impairment was within molecular diagnostics, both legacy Gen-Probe and legacy Hologic Third Wave."
Hologic acquired Gen-Probe last year in a deal worth $3.7 billion, a move that put Hologic in the top tier of the diagnostics space and outside of its comfort zone, women’s health. Hologic said at the time that the deal should add 20¢ per adjusted share during fiscal 2013 and should be "significantly more accretive" thereafter.
Despite a short-term reevaluation of those assets, Hologic is still "extremely encouraged by the long-term growth opportunities that molecular business provides," Muir said.
Alongside its earnings report, Hologic also announced a 3-year $250 million stock repurchase program and an extra $100 million pre-payment on the company’s Term B loan. The company also won FDA approval for its Aptima HPV 16 18/45 genotype assay and won a nod from AuntMinnie.com for its digital breast tomosynthesis systems, according to the company report.
Hologic posted losses of $1.11 billion, or $4.11 per share, on sales of $622.1 million during the 3 months ended September 28. That compared with losses of $77.8 million, or 29¢ per share, on sales of $588.6 million during the same period last year.
Excluding special charges, the device maker posted Q4 earnings of 39¢ per diluted share, beating analysts’ consensus estimates by 2¢.
For the full year, Hologic posted losses of $1.17 billion, or $4.36 per share, on sales of $2.51 billion. That compared with losses of $73.6 million, or 28¢ per share, on sales of $2.01 billion in 2012. Adjusted for 1-time costs, Hologic reported earnings of $1.50, again beating Wall Street by 2¢.
HOLX shares got a big boost by the end of the day yesterday but took an even bigger hit in after-hours trading. Shares closed at a 3.9% increase on the day at $22.90, but were down 8.3% to $21.00 in the wee hours of this morning.