) fiscal second quarter 2013 (ended Dec 29, 2012) earnings of
$1.36 per share beat the Zacks Consensus Estimate by 5 cents.
Earnings increased 13.3% from the year-ago period driven by
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Net sales in the quarter climbed 5% to $883 million. Revenues
were boosted by $34 million due to the inclusion of results of
Sergeant's Pet Care Products, Inc (assets acquired by Perrigo in
Oct 2012) and CanAm Care (assets were acquired by Perrigo in Jan
2012). Newly launched products boosted revenues by $25 million.
Revenues were just shy of the Zacks Consensus Estimate of $884
We note that the second quarter of fiscal 2013 had one less week
of operations compared to the year ago quarter. This impacted
second quarter fiscal 2013 results.
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 $539 million
in the quarter, up 14% from the prior year. Net sales growth was
driven by improved sales of existing products primarily in the
cough/cold, contract and smoking cessation units, along with
strong new product sales, mainly in the gastrointestinal,
cough/cold and dermatological care units. Sales in the segment
were also aided by results from CanAm Care and Sergeant's Pet
Care Products. Adjusted gross profit for the segment climbed
15.6% to $173.2 million.
Nutritional: Perrigo reported revenue of $122 million, down 4.8%
year over year. Results were hurt by reduced sales of existing
products. Adjusted gross profit for the segment improved 6.2% to
$33.2 million in the second quarter of fiscal 2013. The
improvement in adjusted gross profit was attributable to a rise
in price and a favorable product mix.
Rx Pharmaceuticals: The Rx Pharmaceuticals segment performed
disappointingly with net sales declining 8.3% to $162.5 million.
The decrease was attributable to weak sales of existing products.
Increased competition impacted sales of existing products.
Adjusted gross profit for the segment decreased 4.9% to $94.5
Active Pharmaceutical Ingredients: The company reported API sales
of $41 million, down 4% from the prior year quarter. Results were
hurt by reduced sales of existing products.
Other: Segmental sales declined 5.3% to $18 million. Foreign
currency movements negatively impacted results.
Fiscal 2013 View Backed
Perrigo continues to expect adjusted earnings per share for
fiscal 2013 between $5.45 and $5.65, up 9%-13% year over year.
The Zacks Consensus Estimate of $5.54 per share is within the
company's guidance range.
Perrigo to Buy Velcera
In a bid to strengthen its position in the over-the-counter (OTC)
retail pet healthcare market, Perrigo inked a deal to buy animal
health company Velcera, Inc. for $160 million in cash. The deal
is expected to close in calendar year 2013.
We note that Perrigo has been quite active on the acquisition
front lately. In Dec 2012, Perrigo acquired privately-held Cobrek
Pharmaceuticals, Inc. for approximately $45 million in
cash. In Oct 2012, Perrigo acquired the entire assets of
privately-held Sergeant's Pet Care Products, Inc.
Perrigo, which develops, manufactures and distributes OTC and
generic prescription pharmaceuticals among others, carries a
Zacks Rank #3 (Hold). Other players in the generic market, such
Pernix Therapeutic Holdings, Inc.
) carry a Zacks Rank #2 (Buy). Meanwhile, biopharma stock,
) has a Zacks Rank #1 (Strong Buy).