Earnings Beat at Perrigo - Analyst Blog

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Perrigo Company 's ( PRGO ) fourth quarter fiscal 2012 (ended June 30, 2012) adjusted earnings of $1.28 per share beat the Zacks Consensus Estimate of $1.26 per share. The quarter's earnings increased 25.5% from the year-ago period driven by higher revenues.

Net sales in the reported quarter climbed 18% to $832 million. Revenues were aided by the inclusion of $58 million of net sales from Paddock Laboratories (acquired by Perrigo in 2011) and $10 million from CanAm Care (whose assets were acquired by Perrigo in January 2012). However, revenues fell short of the Zacks Consensus Estimate of $854 million.

Quarter in Detail

Perrigo reports revenue from the following five segments: Consumer HealthCare (CHC), Nutritionals, Rx Pharmaceuticals, Active Pharmaceutical Ingredients (API) and other.

Consumer Healthcare: Perrigo reported CHC revenue of $484 million in the fourth quarter, up 12% over the prior year. Net sales growth was driven by improved sales of existing products primarily in the cough/cold, analgesics and smoking cessation units coupled with strong new product sales, primarily in the gastrointestinal and dermatological care units. Segmental sales were also aided by the inclusion of results of CanAm Care. Adjusted gross profit for the segment climbed 12.7% to $151 million in the final quarter of fiscal 2012.

Nutritional: Perrigo reported Nutritional quarterly revenue of $135 million, up 10%. Strong sales of newly launched products, primarily in the infant formula sub-group, contributed to the increase.

Rx Pharmaceuticals: The Rx Pharmaceuticals segment performed impressively with net sales climbing 70% to $157 million in the fourth quarter of fiscal 2012. The huge increase was primarily driven by the acquisition of Paddock Laboratories.

Active Pharmaceutical Ingredients (API): The company reported API sales of $38 million, up 2.7% over the prior year.

Other: Segmental sales declined 5.6% to $17 million.

Fiscal 2012 Results

For fiscal 2012, Perrigo's adjusted earnings of $4.99 per share beat the Zacks Consensus Estimate of $4.97 per share. Also, fiscal 2012 adjusted earnings spiked 24.4% from the year-ago figure due to higher net sales. Net sales for fiscal 2012 came in at $3.2 billion, up 15% from the prior-year period, but in line with the Zacks Consensus Estimate.

Adjusted gross margin at Perrigo improved 170 basis points to $37.1% in fiscal 2012. The improvement was attributable to the acquisition of Paddock Laboratories and strong sales of newly launched products

Fiscal 2013 Projection

Apart from announcing financial results, Perrigo provided earnings projection for fiscal 2013. The company expects adjusted earnings per share in the range of $5.30-$5.50, up 6%-10% year over year. The Zacks Consensus Estimate for fiscal 2013 currently stands at $5.40 per share, well within the company's projected range.

Our Take

We believe Perrigo has a sustainable and diversified product portfolio. The company's strong position in the brand over-the-counter pharmaceutical market and growing generics and API businesses should drive growth in the coming quarters. We are also impressed by Perrigo's strong pipeline.

PERRIGO COMPANY (PRGO): Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing , Business , Earnings , Stocks
Referenced Symbols: API , CHC , PRGO

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