After a run-in with activist investor Carl Icahn prompted a C-suite shuffle, Hologic ($HOLX) is marching on with its effort to slim down and boost sales, cutting its quarterly loss thanks to an uptick in revenue.
The Bedford, MA, diagnostics giant posted a 2% increase in revenue over the same period last year, netting $625 million in its second fiscal quarter. Diagnostics sales slipped about 2% to $290.8 million over the period, but the company's growing breast health segment jumped 9% to $238.7 million, continuing its years-long momentum. Hologic's gynecological surgery business dipped 2% to $72 million, while its skeletal health unit grew 5% to $23.5 million.
With those revenue gains and a nearly $42 million reduction in operating expenses, Hologic managed to shrink its quarterly loss to $16.8 million, down from $51.1 million last year. Now the company is raising its full-year revenue guidance by about 2%, expecting $2.5 billion and roughly 2% annual growth.
The solid quarter amounts to "early progress towards our renewed focus on executional discipline," new CEO Stephen MacMillan said in a statement, but Hologic is hardly out of the weeds. After going deep into debt to close its $3.8 billion buyout of Gen-Probe in 2012, the company has been working to refine its identity, selling off business units and racking up impairment charges that have irked shareholders. Famed corporate raider Icahn stepped in last fall and, after adopting a poison pill strategy, Hologic relented and shook up its boardroom.
Now, the goal is establishing some reliable growth-drivers, said MacMillan, who oversaw some exceptional growth in his 7 years at the helm of Stryker ($SYK).
"To be clear, we still have plenty of work to do in order to consistently improve our operating results, achieve long-term growth and maximize value creation," MacMillan said. "However, I am excited by how our sales teams are responding to help achieve progress towards our primary objectives: leveraging our unique collection of leading technologies to drive organic growth and focusing our capital allocation efforts on debt reduction."
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