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Alere slides following analyst downgrade

NEW YORK (AP) -- Shares of Alere Inc. fell Monday after an analyst downgraded the stock, saying he is not sure about the fourth-quarter performance of Alere's disease management and women's health businesses.

THE SPARK: Wedbush analyst Zarak Khurshid downgraded the medical diagnostics company's shares to "Neutral" from "Outperform." Alere is scheduled to report its fourth-quarter results Friday morning, and Khurshid's forecasts for Alere a bit lower than the Wall Street average. He said the company's third-quarter disease management revenues were disappointing and it is likely a different division, the wellness unit, continued to struggle in the fourth quarter.

The analyst said Alere is trying to reduce its stake in the disease management business and may be looking to divest it. Alere did not immediately respond to a request for comment.

Khurshid also expressed concerns about the prospects for a preeclampsia test the company is developing. Preeclampsia is a dangerous condition that can afflict pregnant women.

THE BIG PICTURE: The Waltham, Mass., company's wellness revenue fell 1 percent in the third quarter, disease management revenue fell 3 percent and revenue from the women's and children's health unit grew 2 percent. But its diagnostics division revenue grew 24 percent.

THE ANALYSIS: Khurshid is projecting income of 55 cents per share and $702 million in revenue. Analysts expect the company to report net income of 56 cents per share and $716 million in revenue, according to FactSet.

SHARE ACTION: Alere shares fell $1.45, or 6.4 percent, to $21.21 in afternoon trading. The stock lost 10 percent, to $17.40, on Nov. 8, the day after Alere reported its third-quarter results. But they've bounced back 30 percent since then.