NEW YORK (TheStreet) -- Hologic (HOLX) ended its fiscal year on a disappointing note as 2014 guidance failed to impress.
The women's health care specialist pegged revenue for fiscal 2014 between $2.425 billion to $2.475 billion and earnings in the range of $1.32 to $1.38 a share. Analysts surveyed by Thomson Reuters forecast profit of $1.62 a share on revenue of $2.585 billion.
Pushing projected revenue lower was weak demand for ThinPrep pap tests, the mammography system 2D Selenia and its heavy menstruation surgical solution NovaSure, the company said.
"We expect fiscal 2014 to be a transitional year for the company," said CEO Jack Cumming in a statement. During a conference call, Chief Financial Officer Glenn Muir added that guidance represented a "realistic view of this coming year" and that top- and bottom-line growth in the low to mid-single digits would return in 2015.
Investment firm Canaccord downgraded the stock to a "hold" rating and lowered its price target to $19 on the weaker-than-expected guidance.
"While we recognize management is likely attempting to mitigate quarterly misses and suggested FY15 should stabilize, we think growth will remain challenged," the report said.
Jefferies was a touch more optimistic, maintaining its "buy" rating but lowering its price target to $24 from $26.
"While a cut to guidance was expected, and even welcome given the recent string of disappointing results, the complexion of what Hologic offered was far from comforting," the report said. "While this outlook could simply be conservatism, the company still has a lot of work to do to do to win back investor confidence."
For the first quarter, the company said it expects revenue between $600 million and $610 million, an year-over-year decrease of at least 5%, and earnings in the range of 30 cents to 31 cents a share. Analysts were looking for earnings of 34 cents a share on $616.67 million in revenue.
For full-year 2013, the Bedford, Mass.-based business recorded profit of $1.50 a share on $2.49 billion in revenue, 24.4% higher than a year earlier. Though earnings were as expected, revenue missed consensus by $23 million.
The board also announced it had authorized a $250 million, three-year stock repurchase program, which would see it reduce total outstanding shares by around 4%.
By late morning, shares had plunged 14.1% to $19.67. Year to date, the stock has fallen 1.3%.
TheStreet Ratings team rates Hologic Inc as a Hold with a ratings score of C+. TheStreet Ratings Team has this to say about its recommendation:
"We rate Hologic Inc (HOLX) a HOLD. The primary factors that have impacted our rating are mixed -- some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its robust revenue growth, good cash flow from operations and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and generally higher debt management risk."
- You can view the full analysis from the report here: HOLX Ratings Report