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Alere Beats on Both Earnings and Revs - Analyst Blog

By: Zacks.com
Posted: 11/6/2013 3:05:00 PM
Referenced Stocks: ALR;BIO;INSY;NUVA

Alere Inc. ( ALR ) reported a whopping 40.5% rise in third-quarter 2013 adjusted earnings per share to 54 cents from 40 cents in the year-ago quarter. With this, earnings beat the Zacks Consensus Estimate by a significant margin of 17 cents.

Following the earnings release, shares of this diagnostics and services company increased 5.9% to $34.0 as on Nov 5.

Net revenues went up 9.0% to $753.9 million, outpacing the Zacks Consensus Estimate of $740 million. Adjusted net revenues rose 9.0% to $754.4 million from $692.3 million at the end of third-quarter 2012.

Adjusted operating income rose 13.8% to $126.8 million from $111.4 million a year ago. Adjusted operating margin improved 70 basis points (bps) to 16.8% from 16.1% a year ago.

Segment Results

Net revenues from Professional Diagnostics grew 11.2% to $590.8 million while adjusted net product and services revenues increased 11.0% to $587.8 million. The company's recent professional diagnostic acquisitions contributed $30.6 million to revenue improvement in the third quarter, partially offset by dispositions-related revenue reduction of $2.3 million. Adjusted operating income increased 17.4% to $138.2 million while adjusted operating margin rose 130 bps to 23.4%.

Net revenues from the Health Information Solutions segment inched down 0.6% to $134.2 million from $135.1 million in the third quarter of 2012. Despite the decrease in revenues, adjusted operating income more than doubled to $7.5 million (5.6% of revenues) from $3.0 million (2.2%) in the comparable year-ago period.

Net revenues from Consumer Diagnostics scaled up 16.1% to $28.9 million. Adjusted operating income decreased 29.8% to $3.9 million, while adjusted operating margin dropped 860 bps to 13.2%, due to higher expenses in the reported quarter.

Financial Position

ALR exited the third quarter with cash and cash equivalents of about $354.0 million, up 7.8% from $328.3 million as of Dec 31, 2012. Total long-term debt increased to $4.4 billion from $4.2 billion as of Dec 31, 2012.

Our Take

We are impressed with Alere's third-quarter results, which beat the Zacks Consensus Estimate at both fronts. The company has strategically positioned itself for both organic and inorganic expansion. The company is adequately placed to achieve its long-term revenue and earnings growth targets based on its new product cycle, strategic acquisitions and effective execution.

Alere presently carry a Zacks Rank #3 (Hold). Other better-performing medical stocks that are worth considering include Bio-Rad Laboratories , Inc. ( BIO ), INSYS Therapeutics Inc. ( INSY ) and NuVasive, Inc. ( NUVA ). All these stocks carry a Zacks Rank #1 (Strong Buy).



ALERE INC (ALR): Free Stock Analysis Report

BIO-RAD LABS -A (BIO): Free Stock Analysis Report

INSYS THERAP (INSY): Free Stock Analysis Report

NUVASIVE INC (NUVA): Free Stock Analysis Report

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