Alere (ALR) reported third-quarter 2010 adjusted earnings per share (from continuing operations) of 59 cents, matching the Zacks Consensus Estimate of 59 cents while falling short of the year-ago figure of 74 cents.
The company’s adjusted results exclude amortization, charges associated with the write-up to fair value of inventory and restructuring charges, among other items.
Net revenue was $538.7 million in the reported quarter, up 5.1% year over year, and ahead of the Zacks Consensus Estimate of $533 million. Recent acquisitions in the professional diagnostics segment contributed $56 million of incremental revenues.
Influenza-related sales in North America dropped to only $7 million compared with $40.4 million in the year-ago quarter. Global respiratory revenue, not including influenza sales in North America, dropped 36% to $20.6 million.
Adjusted gross margin, as reported by the company, was 56%, down from 57% in the year-ago quarter.
Balance Sheet
Cash and cash equivalents totaled $487.6 million at the end of the quarter, down 12.3% year over year. Total long-term liabilities amounted to $2.9 billion, down 3.3% on a year-over-year basis.
Outlook
Alere believes that current austerity steps undertaken in Europe are dampening both revenues and margins. However, 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, remains a solid approach while at the same time ensuring affordability.
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.
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 impressive, which has been developed through a combination of internal R&D as well as acquisitions.
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