Massachusetts-based device maker Alere (NYSE:ALR) said in its quarterly earnings call that it’ll shed some of its business units in order to reorganize in the wake of a missed quarter.
The company said this month that it’s examining some of its divisions for divestiture, saying that Alere has spread itself too thin.
"Operating so broadly has caused diffuse resource allocation that has ultimately hindered financial performance," COO and interim CEO Namal Nawana said during the company’s recent conference call with analysts. "We have agreed on a plan to assess the full range of Alere’s technology assets against our forward strategic direction. This work will be completed in the coming months."
Alere has already pulled the trigger on the divestiture of the health management business, Nawana noted. The company will also evaluate its oncology, women’s health and veterinary units for a potential sale, allowing Alere to focus on its diagnostics business.
Most of the cuts would likely come from Alere’s Connected Health division, built mostly from acquisitions, which Nawana blamed for about $10 million of Alere’s net loss in the most recent quarter, the Boston Business Journal reported.
The restructuring comes after a big miss for Alere, with sales and earnings coming in below expectations for its most recent quarter. The company reported a 3.7% decline in sales, but shaved 18% off of its losses during the 3 months ended June 30, 2014.
In total Alere reported losses of $49.6 million, or 67¢ per share, on sales of $731.3 million during the quarter. That compared with losses of $60.3 million, or 81¢ per share, on sales of $759.1 million during the same period last year.
Excluding special charges, the company reported adjusted earnings of 42¢ per share, missing analysts’ consensus estimates by 16¢.
ALR shares took a major hit after the announcement and are still down 10.2% since their open on Monday, Aug. 4, 2014.
