Alere Beats Earnings Est, Turns to Profit - Analyst Blog
May 10 2013 - 7:30AM
Zacks
Alere (ALR), a
medical products company focused on integrating rapid diagnostics
with health management, reported first quarter 2013 adjusted
earnings per share of 51 cents beating the Zacks Consensus Estimate
of 48 cents.
Reported net income was about $7.2
million (or earnings of 9 cents per share) in the first quarter
compared to a net loss of $4.1 million (or loss of 5 cents per
share) in the year-ago quarter. Reported results include several
one-time or extraordinary items such as restructuring charges and
amortization.
Revenues
Net revenues came in at $739.2
million in the reported quarter, up 10.2% year over year,
surpassing the Zacks Consensus Estimate of $724 million. Adjusted
revenue came to $739.9 million in the reported quarter.
Segment
Analysis
Net revenues from Professional
Diagnostics were $582.5 million (includes license and royalty
revenues of $3.9 million), up 12% year over year. Adjusted organic
growth for the segment was 1.1% on a year-over-year basis.
Under the Professional Diagnostics
segment, revenues from Cardiology ($114.9 million) declined 17%
year over year. Revenues from Infectious disease ($189.8 million)
increased 26% year over year whereas revenues from Toxicology ($149
million) and other sources ($74.7 million) increased 22% and
dropped 1%, respectively, on a year-over-year basis, respectively.
Diabetes business line accounted for $50.1 million of segment
revenues, up 78% year over year.
Revenues from the Health
Information Solutions segment were $134.2 million, up 3% year over
year. Revenue growth was driven by coagulation monitoring programs
in the residential setting.
Under the Health Information
Solutions segment, revenues from Disease and Case Management ($54.1
million) rose 1% and revenues from Wellness ($26.3 million)
declined 3% year over year. Revenues from Women’s & Children’s
Health ($29.1 million) and Patient Self-Testing Services ($24.7
million) were down 2% and up 20% on a year-over-year basis,
respectively.
Margin
Gross margin dropped to 49% in the
reported quarter from 53% in the year-ago quarter. Operating margin
dropped to 4.1% from 5.2% over the same timeframe.
Balance Sheet
Alere exited the first quarter with
cash and cash equivalents of about $327.2 million, down marginally
0.3% year over year. Total long-term debt (net of current portion)
amounted to $3,800.5 million, up 4.4% year over year.
Outlook
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.
Alere carries a Zacks Rank #3
(Hold). We are more positive about Conceptus, Inc.
(CPTS), which carries a Zacks Rank #1 (Strong Buy). We are also
positive about Becton, Dickinson and Company (BDX)
and The Cooper Companies Inc. (COO), each of which
carry a Zacks Rank #2 (Buy).
ALERE INC (ALR): Free Stock Analysis Report
BECTON DICKINSO (BDX): Free Stock Analysis Report
COOPER COS (COO): Free Stock Analysis Report
CONCEPTUS INC (CPTS): Free Stock Analysis Report
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