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 seekinginformation 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

(END) Dow Jones Newswires

November 04, 2016 12:15 ET (16:15 GMT)

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