S&P 500: -3.44 (-0.38%)
Hologic (HOLX) -20.19%
Hologic missed earnings estimates as a result of significant write-downs to goodwill, but much of the disappointment was in response to delay in the U.S. launch of its Tomosynthesis mammography system.
The company said it would postpone its filing for next-generation imaging device with U.S. health regulators, which was proposed for June 2009. The approval of the tomosynthesis product is expected to be a key growth driver in the Breast Health division, which accounts for more than half of Hologic’s revenues.
Principal Financial Group (PFG) +10.75%
Principal blamed the decline in profit on lower asset valuations, including the impact of “significant equity market declines.” Specifically, Principal said its assets under management tumbled 22 percent from a year ago to $236.6 billion.
Looking to address balance sheet concerns, Principle said it increased its position in highly liquid assets by 76 percent to $5.8 billion and boosted its cash and equivalent holdings by 141 percent to $2.7 billion. Principal noted the earnings power of their three key retirement and investment products, which generated $6 billion of sales on a combined basis in the first quarter.
Because Principal is highly sensitive to the equity markets and the economy, they will continue to face tighter liquidity and depressed earnings in coming quarters. Still, the company has one of the most valuable franchises in the life insurance industry, while its core fundamentals of its pension and asset management businesses are still largely intact.
Emerson Electric (EMR) -1.50%
Emerson’s fiscal second-quarter profit fell 32 percent on slumping sales and a stronger dollar, though the earnings quality was strong – as is usually the case with Emerson.
CEO David Farr doesn’t expect a full recovery in their business to occur until 2011, as end-market demand recovers slowly in Europe and North America. Nevertheless, Emerson reaffirmed its 2009 earnings outlook. The company also said it will not deviate from its plans to acquire complementary businesses and expects to spend about $1 billion on takeovers this year.
Walgreen (WAG) -0.32%
Walgreen posted a 5.7 percent jump in April same-store sales, versus consensus estimates of 4.5 percent, aided in large part by the Easter holiday.
Pharmacy script growth of 4.2 percent was the strongest result reported since July 2007, as the industry continues to benefit from cycling Zyrtec’s shift to over-the-counter and an unusually high number of safety concern issues.
The impact of swine flu in the front-end (hand sanitizer, masks, etc) and pharmacy (Tamiflu, Relenza) was only 20 basis points.
Quick Hits
Peter Lazaroff, Junior Analyst
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