) fourth-quarter fiscal 2014 (ended Jun 28, 2014) earnings of $1.74
per share beat the Zacks Consensus Estimate of $1.55.
Higher-than-expected revenues led to the earnings beat. Moreover,
fourth quarter earnings were 11% above the year-ago figure.
Net sales in the quarter climbed 18% to $1.14 billion. Revenues
increased $112 million due to the contribution from Elan
Corporation (acquired in Dec 2013) and product acquisitions from
Rosemont Pharma and Aspen. Newly launched products boosted revenues
by $65 million. Revenues were above the Zacks Consensus Estimate of
$1.09 billion. The earnings report found favor with the investors
and the stock gained in early trading.
For fiscal 2014, Perrigo reported earnings of $6.39 per share up
14%. Perrigo had projected adjusted earnings per share for fiscal
2014 in the range of $6.15 to $6.30. The Zacks Consensus Estimate
for fiscal 2014 was $6.20 per share. Net sales in fiscal 2014
climbed 15% to $4.06 billion, just above of the Zacks Consensus
Estimate of $4.02 billion.
The Fourth Quarter in Detail
Perrigo reports revenues primarily from the following segments:
Consumer HealthCare (CHC), Nutritionals, Rx Pharmaceuticals, Active
Pharmaceutical Ingredients (API) and Specialty Sciences. The
Specialty Sciences unit came into existence following the
completion of the acquisition of Elan Corporation on Dec 18,
Perrigo reported CHC revenues of $607 million in the quarter, up
8%. Strong performance of existing products in the antacids and
smoking cessation units boosted segmental sales by $52 million.
Newly launched products also performed well in the quarter. Sales
were boosted by $6 million due to the acquisition of OTC offerings
Segmental revenues were hurt by lower sales of existing
offerings primarily in the contract manufacturing and animal health
units. Adjusted gross margin for the segment declined to 33.9% from
36% a year ago. Margins were hurt by an under absorption of fixed
production costs. Reduced sales of higher margin animal health
products in the quarter also led to the contraction in margins.
Perrigo reported revenues of $145 million, down 3% year over year.
Below par sales of products in the infant/toddler food and VMS
units hurt segmental sales. Adjusted gross margin for the segment
declined to 27.5% in the fourth quarter of fiscal 2014 from 28.9% a
year ago. Margins contracted due to the timing of maintenance at
the manufacturing facilities
The Rx Pharmaceuticals segment performed encouragingly during the
quarter with net sales improving 30% to $253 million. Sales of new
products boosted segmental revenues by $35 million. Inclusion of
results of Fera's ophthalmic product portfolio boosted sales by $20
million. Adjusted gross margin for the segment expanded to 60.4%
from 56% a year ago. The increase was due to a favorable product
mix and sales of higher margin products following the Fera
Active Pharmaceutical Ingredients:
The company reported API sales of $33 million, down 21% from the
prior-year quarter. Results were hurt by lower sales of existing
products due to increased competition.
Segmental revenues came in at $86 million due to royalties received
by Perrigo on multiple sclerosis drug Tysabri from
Others accounted for the remaining revenues.
We note that this is the third earnings report for the Dublin,
Ireland-based Perrigo Company plc, formed following the Dec 2013
merger of Allegan, MI based Perrigo Company and Elan
Fiscal 2015 View
Apart from announcing earnings results, Perrigo provided
guidance for fiscal 2015. The company expects adjusted earnings per
share in the range of $7.20 to $7.50, up 13% to 17% over fiscal
2014 levels. The Zacks Consensus Estimate of $7.47 per share is on
the higher end of the guidance range.
Perrigo holds a Zacks Rank #4 (Sell). Some better-ranked stocks
in the health care sector include
). Both stocks sport a Zacks Rank #1 (Strong Buy).
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