ABAX Abaxis, Inc. (delisted)

Alere (ALR), a medical products company focused on integrating rapid diagnostics with health management, reported second-quarter fiscal 2011 adjusted earnings per share of 53 cents, beating the corresponding Zacks Consensus Estimate of 51 cents.

Reported net loss was about $4.7 million (or 5 cents per share) in the second quarter compared with a loss of $8.3 million (10 cents per share) in the prior-year period. Reported net loss in the most recent quarter contains, among other items, amortization and restructuring charges.

Revenues

Net revenues were $567.2 million in the reported quarter, up 8.5% year over year, missing the Zacks Consensus Estimate of $572 million. 

By segments, revenues from Professional Diagnostics were $404.2 million, up 17.6% year over year. Recent acquisitions resulted in $21.2 million of incremental sales compared with the prior-year quarter. Adjusted organic segment growth was 7% on a year-over-year basis.

Revenues from the Health Management segment were $135.6 million, down 9.5% due to several factors.    

Margin

Adjusted gross margin, as reported, was 54.9% in the second quarter, down from 56.1% in the year-ago quarter. The same for the Professional Diagnostics segment was 58.6%, down from 59.4% a year ago while that for the Health Management unit dropped to 48.4% from 52.4% in the prior-year period.    

Balance Sheet

Cash, cash equivalents and marketable securities totaled $557.8 million as of June 30, 2011, up 107.1% on a year-over-year basis. Long-term liabilities, in the form of notes payable, inclusive of current portion, amounted to $2.8 billion, up 29.3%.

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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