Alere Shares Fall on Disappointing Quarterly Report Amid Merger Battle
November 04 2016 - 12:19PM
Dow Jones News
By Anne Steele
Alere Inc., locked in a contentious merger battle with reluctant
buyer Abbott Laboratories, posted earnings sharply below estimates
and an unexpected slide in revenue for its latest quarter.
Shares in the company tumbled 11% midday to $37.50, at a sharp
discount to the agreed-upon per-share deal price of $56.
Abbott agreed to buy the diagnostic test provider in February
for nearly $5 billion. Since then, Alere disclosed it has received
a subpoena regarding a foreign corruption investigation over
payments in Africa, Asia and Latin America, and it said separately
that federal investigators are seeking information about
government-billing practices. The company was also late in filing
its 2015 annual report.
Since agreeing to the deal, Abbott has signaled it may not want
to ultimately go through with it. In late August, Alere escalated
its fight with Abbott by filing a lawsuit against its potential
acquirer to push it to move forward with the deal.
Alere's third-quarter report came as a disappointment to
investors. In all, for the September quarter, Alere earned $21.8
million, or 19 cents a share, compared with a loss of $2.3 million,
or a dime a share, a year earlier. Analysts polled by Thomson
Reuters were looking for earnings of 54 cents a share. The company
blame the decline on $41 million in merger and legal-related
expenses, $12 million of investments in infrastructure and
performance improvement initiatives and $5 million in acquisition
costs.
Revenue fell, unexpectedly, 3.5% to $582.4 million. Analysts had
anticipated an increase to $605.5 million. Foreign currency dented
the top line $4 million and the company said organic revenue
slipped 0.7% during the quarter.
Gross margin was unchanged at 46%.
Write to Anne Steele at Anne.Steele@wsj.com
(END) Dow Jones Newswires
November 04, 2016 12:04 ET (16:04 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
Abbott Laboratories (NYSE:ABT)
Historical Stock Chart
From Mar 2024 to Apr 2024
Abbott Laboratories (NYSE:ABT)
Historical Stock Chart
From Apr 2023 to Apr 2024
