Hologic revenue warning hurts stock

Investors sold shares of bone densitometry company Hologic last month after the Waltham, MA, firm announced that it expected lower revenues for its first quarter (end-December). Hologic on Dec. 23 told investors that it expected first-quarter sales of about $25 million, down slightly compared with $27.1 million in the same period a year ago.

The news prompted a sell-off in Hologic stock, with the company's shares dropping from $25.38 on Dec. 22 to $20.81 on Dec. 23, a drop of 18%. Hologic said that two-thirds of its x-ray bone densitometer sales were of its older QDR 1000plus model, which has lower prices and margins compared with the company's Acclaim densitometer series. QDR 1000plus sales are up, due to Hologic's increased penetration of the primary-care market that has resulted from relationships such as the one it has forged with Physician Sales and Service.

Several other bone densitometry companies reported revenue shortfalls in 1997 due to confusion over Medicare reimbursement rates for bone densitometry (SCAN 11/12/97). Hologic said that it is comfortable with analysts' estimates projecting the company's performance through its year end in September.