Haemonetics Reports Strong Earnings Growth Amid Revenue Headwinds, Eyes 2026 Outlook

Haemonetics Corporation (NYSE:HAE) delivered a mixed financial performance for fiscal Q4 2025, with adjusted earnings surging 38% to $1.24 per share while total revenue declined 3.7% to $330.6 million. The results underscore the company’s strategic pivot toward high-margin hospital technologies, even as legacy segments like Plasma and Blood Center face near-term challenges. With a newly announced $500 million share repurchase plan and a detailed fiscal 2026 outlook, investors now must weigh whether Haemonetics can sustain its margin expansion and navigate sector-specific headwinds.

Earnings Growth Driven by Margin Expansion and Hospital Segment Strength

The quarter’s standout performance was its operating margin, which nearly tripled to 21.6% compared to 8.7% in Q4 2024, fueled by cost discipline and pricing power. Gross margins improved to 58.4%, up from 51.2%, as the Hospital segment’s high-margin products like the NexSys plasma collection system and TEG blood analysis tools drove revenue growth of 12.2% to $147.9 million.

However, the Plasma segment saw revenue fall 9.1% to $126.7 million, reflecting ongoing transitions with major clients like CSL Plasma, while the Blood Center segment plummeted 22.2% due to the divestiture of its Whole Blood product line. The company’s organic revenue—excluding currency and portfolio shifts—dropped 0.2%, highlighting the uneven recovery across its business lines.

Fiscal 2026 Outlook: Balancing Growth and Challenges

Haemonetics provided a detailed outlook for fiscal 2026, projecting:
- Revenue:
- Plasma: A decline of 7-10% as the CSL transition continues.
- Blood Center: A drop of 23-26%, excluding the impact of the Whole Blood divestiture.
- Hospital: Growth of 8-11%, supported by new product launches and pricing.
- Total organic revenue growth (excluding CSL disposables) is expected to rise 6-9%.
- Margins: An adjusted operating margin of 26-27%, up from 24.9% in Q4 2025.
- EPS: A target of $4.70–$5.00, reflecting margin gains and cost control.
- Free Cash Flow: $160–$200 million, up from $145 million in fiscal 2025.

The company also announced a new $500 million share repurchase program over three years, signaling confidence in its cash flow generation.

Key Risks and Opportunities

• Near-Term Revenue Pressures: The Plasma and Blood Center declines are expected to persist in 2026, but Haemonetics believes the Hospital segment’s growth will offset these headwinds. The company’s gross margin expansion and free cash flow trajectory suggest it is managing costs effectively.
• Strategic Divestitures and Acquisitions: The exit of the Whole Blood line and acquisition of Attune Medical (a vascular closure device firm) aim to sharpen its focus on high-margin technologies. These moves have bolstered its cash reserves to $306.8 million, up $128 million year-over-year.
• Competitive Landscape: Growth in interventional cardiology and blood management markets—key areas for Haemonetics’ NexSys and TEG products—could provide long-term tailwinds.

Conclusion: A Story of Margin Discipline and Selective Growth

Haemonetics’ fiscal Q4 results and 2026 guidance reveal a company in transition. While legacy segments face near-term declines, its Hospital segment’s strong performance and margin expansion validate its strategic realignment. The 2026 outlook targets are ambitious but achievable if the Hospital segment continues to outpace expectations.

Crucial metrics to watch include:
- Hospital Segment Growth: Whether its 8-11% revenue target is met, particularly with new products like the VASCADE MVP XL vascular closure device.
- Operating Margin Expansion: The 26-27% target is achievable given cost discipline and higher-margin product sales.
- Share Buyback Impact: The $500 million program could reduce shares outstanding by ~10%, boosting EPS per share over time.

Investors should also monitor macro factors, such as plasma demand trends and the pace of CSL’s transition, which could pressure margins in the Plasma segment. Despite these risks, Haemonetics’ improved cash flow, strategic portfolio shifts, and focus on high-margin areas position it to meet its long-range plan goals. For now, the stock’s valuation—trading at 18x 2026 EPS estimates—appears reasonable given its margin tailwinds and growth drivers in hospital technologies.

In short, Haemonetics’ story is evolving from a commodity-based blood products supplier to a high-margin medtech innovator. While challenges remain, the company’s execution in fiscal 2025 suggests it’s on the right path.