) fourth-quarter fiscal 2013 (ended June 29, 2013) earnings of
$1.57 per share surpassed the Zacks Consensus Estimate by a
penny. The company reported earnings of $1.28 per share in the
final quarter of fiscal 2012. The year-over-year rise in earnings
was due to higher revenues.
Net sales in the quarter climbed 16.3% to $967.2 million.
Revenues increased $83 million due to the inclusion of results of
Sergeant's Pet Care Products, Inc. (assets acquired by Perrigo in
October 2012), Rosemont Pharma (acquired by Perrigo in February
2013), Velcera (acquired in April 2013) and Fera's ophthalmic
product portfolio (acquired in June 2013). Newly launched
products boosted revenues by $30 million. Revenues missed the
Zacks Consensus Estimate of $999 million. The revenue miss in the
final quarter of fiscal 2013 impacted the shares negatively.
For fiscal 2013, Perrigo reported earnings of $5.61 per share
(including a tax benefit of 8 cents) as against fiscal 2012
earnings of $4.99 per share (including a tax benefit of 28 cents
per share). Perrigo had projected adjusted earnings per share for
fiscal 2013 in the range of $5.53 - $5.73 per share. The Zacks
Consensus Estimate for fiscal 2013 was $5.60 per share. Net sales
in fiscal 2013 climbed 12% to $3.5 billion, just shy of the Zacks
Consensus Estimate of $3.6 billion.
The Fourth Quarter in Detail
Perrigo reports revenue primarily from the following segments:
Consumer HealthCare (CHC), Nutritionals, Rx Pharmaceuticals and
Active Pharmaceutical Ingredients (API).
Consumer Healthcare: Perrigo reported CHC revenue of $563 million
in the quarter, up 16% from the prior year. Net sales growth was
driven by improved sales of existing products primarily in the
contract and smoking cessation units, along with strong new
product sales, mainly in the cough/cold and smoking cessation
Sales in the segment were also aided by results from Sergeant's
Pet Care Products and Velcera. Adjusted gross margin for the
segment climbed to 36% from 31.9% a year ago.
Nutritional: Perrigo reported revenue of $150 million, up 11%
year over year. All the sub-groups of the segment witnessed
growth during the reported quarter. Adjusted gross margin for the
segment declined marginally to 28.9% in the fourth quarter of
fiscal 2013. The decline was due to higher sales of vitamins,
minerals and supplements which are low margin products.
Rx Pharmaceuticals: The Rx Pharmaceuticals segment performed
encouragingly during the quarter with net sales improving 24% to
$195 million. Sales of new products boosted segmental revenues by
$12 million. Inclusion of results of Rosemont Pharma and Fera's
ophthalmic product portfolio boosted sales by $16 million.
Adjusted gross margin for the segment increased to 56% from 51.6%
a year ago.
Active Pharmaceutical Ingredients: The company reported API sales
of $41 million, up 6% from the prior-year quarter. Results were
aided by a favorable product mix.
Fiscal 2014 View
Perrigo expects earnings per share (on an adjusted basis) for
fiscal 2014 in the range of $6.35 and $6.60, up 13%-18% over
fiscal 2013 levels. The Zacks Consensus Estimate for fiscal 2014
currently stands at $6.67 per share. The projection excludes the
impact of Perrigo's impending acquisition of
). We remind investors that last month, Perrigo inked a
definitive agreement to acquire Elan Corporation for
approximately $8.6 billion in a bid to boost its revenue stream
and save taxes.
The cash and stock deal, cleared by the boards of directors of
both the companies, is expected to close by the end of calendar
year 2013. On completion of the deal, Perrigo's revenue stream
would be boosted as it will receive significant royalties on
multiple sclerosis drug Tysabri from
Biogen Idec Inc.
Management expects Elan's acquisition, on closure, to boost the
standalone Perrigo's fiscal 2014 adjusted earnings by at least 10
cents per share. Fiscal 2015 adjusted earnings are expected to be
boosted by 70-80 cents per share, including synergies.
Perrigo currently carries a Zacks Rank #3 (Hold). Right now,
Gilead Sciences Inc.
) looks attractive, with a Zacks Rank #1 (Strong Buy).
BIOGEN IDEC INC (BIIB): Free Stock Analysis
ELAN CP PLC ADR (ELN): Free Stock Analysis
GILEAD SCIENCES (GILD): Free Stock Analysis
PERRIGO COMPANY (PRGO): Free Stock Analysis
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