Alere Beats in 1Q, Incurs Loss - Analyst Blog

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Alere ( ALR ), a medical products company focused on integrating rapid diagnostics with health management, reported first-quarter adjusted earnings per share of 77 cents, beating the corresponding Zacks Consensus Estimate of 64 cents.

Reported net loss was about $4.1 million (or 5 cents per share) in the first quarter which contains, among other items, amortization and restructuring charges. Reported net income was $8.1 million (9 cents per share) in the year-ago quarter. 

Revenues

Net revenues were $671.1 million in the reported quarter, up 15.2% year over year, beating the Zacks Consensus Estimate of $661 million.

By segment, net revenues from Professional Diagnostics were $518.3 million, up 24.7% year over year. Recent acquisitions resulted in $96.9 million of incremental sales compared with the prior-year quarter. Adjusted organic segment growth (excluding flu sales) was 6.9% on a year-over-year basis.

Revenues from the Health Management segment were $130.8 million, down 9%.

Margin

Adjusted gross margin was 55.9% in the fourth quarter, up marginally from 55.8% in the year-ago quarter. The same for the Professional Diagnostics segment was 60.3%, up somewhat from 59.6% a year ago. Gross margin at the Health Management unit dropped to 45.4% from 49% in the prior-year quarter on account of self-sourcing on the part of certain plans.    

Balance Sheet

Cash, cash equivalents and marketable securities totaled about $514.1 million as of March 31, 2011, up 71.8% on a sequential basis. Long-term liabilities (including current portion), in the form of notes payable, amounted to $3,534 million, up 5.4% sequentially.

Outlook

Diagnostic tests are shifting closer to the consumers and into the home testing market, as more diagnostic tests are being developed to monitor patients rather than simply diagnose them. Alere's strategy of combining disease management with point-of-care testing ("POCT"), in a manner that encourages patients to take responsibility over their overall health care, is viewed as a prudent approach while at the same time ensuring affordability.

In addition to growing its revenues through a combination strategy of continued acquisitions and measured organic growth, the company is committed to improving its operating margin. Further, its product pipeline is strong, which has been developed through a combination of internal R&D as well as serial acquisitions. One of the company's competitors is Abaxis ( ABAX ).


 
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ALERE INC (ALR): Free Stock Analysis Report
 
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Stocks

Referenced Stocks: ABAX , ALR

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