) first quarter fiscal 2013 (ended September 29, 2012) earnings
of $1.27 per share (including a tax benefit of 8 cents but
excluding other special items) increased 15.5% from the year-ago
period driven by higher revenues. The Zacks Consensus Estimate
was $1.24 per share.
Net sales in the reported quarter climbed 6% to $770 million.
Revenues were aided by the inclusion of $19 million of net sales
from Paddock Laboratories (acquired by Perrigo in 2011) and $9
million from CanAm Care (whose assets were acquired by Perrigo in
January 2012). Newly launched products boosted revenues by $26
million. Revenues fell short of the Zacks Consensus Estimate of
Quarter in Detail
Perrigo reports revenue from the following five segments:
Consumer HealthCare (CHC), Nutritionals, Rx Pharmaceuticals,
Active Pharmaceutical Ingredients (API) and other.
Perrigo reported CHC revenue of $450 million in the first quarter
of fiscal 2013, up 9% over 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.
Segmental sales were also aided by the inclusion of results of
CanAm Care. Adjusted gross profit for the segment climbed 12.6%
to $146.9 million in the first quarter of fiscal 2013.
Perrigo reported Nutritional quarterly revenue of $103 million,
down 13.7%. Segmental results were hurt by reduced sales of
existing products primarily in the vitamin, minerals and dietary
supplements division. Adjusted gross profit for the segment
declined 18.4% to $28.9 million in the first quarter of fiscal
The Rx Pharmaceuticals segment performed impressively with net
sales climbing 28% to $163 million in the first quarter of fiscal
2013. The increase was primarily driven by the acquisition of
Moreover, strong sales of newly launched products coupled with
favorable pricing also aided results in the reported quarter.
Adjusted gross profit for the segment climbed 25% to $95 million
in the first quarter of fiscal 2013.
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PERRIGO COMPANY (PRGO): Free Stock Analysis
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Active Pharmaceutical Ingredients:
The company reported API sales of $36.4 million, down 23.6% over
the prior year quarter. Results were hurt by reduced sales of
Segmental sales declined 5.5% to $17 million. Foreign currency
movements negatively impacted results.
Fiscal 2013 Projection
Apart from announcing financial results, Perrigo upped its
earnings projection for fiscal 2013. The company now expects
adjusted earnings per share for fiscal 2013 in the range of
$5.45-$5.65, up 9%-13% year over year (previous guidance:
$5.30-$5.50). The Zacks Consensus Estimate for fiscal 2013
currently stands at $5.49 per share.
We currently have a Neutral recommendation on Perrigo. The stock
carries a Zacks #2 Rank (short-term Buy rating).
We believe Perrigo has a sustainable and diversified product
portfolio. The company's strong position in the brand OTC
pharmaceutical market and growing generics and active
pharmaceuticals ingredient (API) businesses are expected to drive
growth in the coming quarters.
We note that Perrigo's dominant position in the store brand OTC
drug market was further strengthened recently when it gained
tentative approval from the US Food and Drug Administration (FDA)
to market its store brand version of
Merck & Co.
) Zegerid OTC. We are also impressed by Perrigo's strong