Haemonetics Q3 Earnings Beat Overshadowed by Revenue Decline, Aligning with Plasma Transition Concerns

What happened

Haemonetics reported Q3 earnings that exceeded both EPS and revenue estimates, providing a positive headline surprise. Margins expanded sharply, reflecting operational efficiency or favorable product mix adjustments. However, sales fell 2.7% year over year, indicating underlying top-line pressure that contradicts the earnings beat. This revenue decline aligns with the anticipated CSL Plasma transition, a key near-term headwind highlighted in the DeepValue report for fiscal 2026. The stock's post-report slip suggests investor focus has shifted to revenue weakness, overshadowing the margin improvements.

Implication

This earnings report reinforces the DeepValue assessment of near-term headwinds from the CSL Plasma transition, with revenue decline validating management's cautious outlook. Margin expansion offers temporary relief but may not be sustainable if Hospital growth fails to fully offset Plasma weakness, as highlighted in the report. The market's negative reaction indicates heightened sensitivity to top-line performance, prioritizing long-term growth over short-term earnings surprises. Monitoring segment revenues, especially Plasma stabilization and Hospital execution, is critical for assessing future rerating potential. The $500 million buyback authorization could cushion EPS, but fundamental improvements in revenue trends are necessary for a more favorable risk-reward profile.

Thesis delta

The thesis remains largely unchanged, with the news confirming the near-term revenue pressure from the Plasma transition as anticipated. Margin expansion provides some offset but does not alter the core narrative of constrained visibility and segment mix challenges. No shift in the 'Watch/Neutral' stance is warranted yet, but it reinforces the need for vigilance on execution and stabilization metrics.