), a medical products company focused on integrating rapid
diagnostics with health management, reported third quarter 2012
adjusted earnings per share of 48 cents, beating the Zacks
Consensus Estimate by a penny.
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Reported net loss was about $3.5 million (or loss of 11 cents per
share) in the third quarter compared to a net income of $239.7
million (or earnings of $2.48 per share) in the year-ago quarter.
Net revenues came in at $691.4 million in the reported quarter,
up 18% year over year, surpassing the Zacks Consensus Estimate of
Net revenues from Professional Diagnostics were $531.4 million
(includes license and royalty revenues of $3.2 million), up 24%
year over year. Adjusted organic growth for the segment was 1% on
a year-over-year basis.
Under the Professional Diagnostics segment, revenues from
Cardiology ($122.4 million) declined 4% year over year. Revenues
from Infectious disease ($136.6 million) decreased 4% year over
year, whereas revenues from Toxicology ($156.1 million) and other
sources ($78.1 million) increased 67% and 26% on a year-over-year
basis, respectively. Diabetes business line accounted for $35.7
million of segment revenues.
Revenues from the Health Management segment were $135.1 million,
up 4% year over year. Revenues were driven by coagulation
Under the Health Management segment, revenues from Disease and
Case Management ($57.4 million) dipped 3% and revenues from
Wellness ($24.3 million) declined 1% year over year. Revenues
from Women's & Children's Health ($29.1 million) and Patient
Self-Testing Services ($24.3 million) were up 2% and 38% on a
year-over-year basis, respectively.
Adjusted gross margin was 52.9% in the third quarter compared
with 54.7% in the year-ago quarter. The same for the Professional
Diagnostics segment was 55.8% compared with 58.9% a year ago.
Adjusted gross margin for the Health Management segment was
46.2%, flat on a year-over-year basis.
Adjusted operating margin was 16.6% in the quarter compared with
20.8% in the prior-year quarter. Adjusted operating margin for
the Professional Diagnostics segment was 22.1% compared with
28.1% a year ago. Adjusted operating margin for the Health
Management segment was 2.2% compared with 3.6% in the year-ago
Alere exited the third quarter with cash and cash equivalents of
about $302.3 million, up 9.2% year over year. Total long-term
debt (net of current portion) amounted to $3,541.3 million.
Adjusted free cash flow came in at $59.7 million in the third
Diagnostic tests are shifting closer to the consumers and into
the home testing market, as more diagnostic tests are 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 revenues through a combined strategy of
continued acquisitions and measured organic growth, the company
is committed to improvement of 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
Alere carries a Zacks #3 Rank, which translates into a short-term
Hold rating. We currently have a long-term 'Underperform'
recommendation on the stock.