Hologic, Inc. (HOLX) reported fourth quarter earnings of 28 cents per share, above the Zacks Consensus Estimate of 26 cents, but a couple of cents below the year-ago earnings. For fiscal 2009, the company earned $1.17 per share, a cent below the year-ago earnings.

Revenues declined 8.9% in the reported quarter and 2% in fiscal 2009. We remain concerned about the decline, which is largely attributable to the stringent economic and capital spending environment.

Furthermore, Hologic’s strategy to grow by acquisitions has inherent risks. Strong competition confronting the company’s products also concerns us. Consequently, we downgrade the stock to Underperform with a price target of $14.

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