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Perrigo Company (PRGO) Q4 Earnings: Disappointment in Store?

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Perrigo Company plcPRGO is expected to report fourth-quarter 2016 results this month. Perrigo has a mixed track record as the company beat expectations in two of the last four quarters and missed the same in the other two. Overall, the company has an average negative earnings surprise of 1.45%.

Perrigo's shares have lost 4.6% so far this year, while the Zacks classified Medical Products industry witnessed an increase of 5.3%.

In the last reported quarter, Perrigo posted a negative earnings surprise of 3.77%. Let's see how things are shaping up at the company this quarter.

Perrigo Company Price and EPS Surprise

Perrigo Company Price and EPS Surprise | Perrigo Company Quote

Factors Influencing This Quarter

According to the company, price erosion and changing market dynamics across the Prescription Pharmaceuticals (Rx) business will continue to hurt its performance. The company anticipates the pricing environment to impact the Rx segment's performance in the fourth quarter. Ongoing focus on drug pricing is another concern.

In the Branded Consumer Healthcare (BCH) segment, Perrigo continues to implement transformational changes and improvements in products and processes. The BCH segment is projected to underperform due to lower-than-expected revenues from certain high-margin products. Moreover, delay in new product launches and softness in pricing in the Consumer Healthcare segment are expected to continue hurting the performance of the segment.

However, the OTC business and the infant nutrition category within the CHC segment and product acquisitions and new products in the Rx segment are expected to boost sales in the coming quarter.

Earnings Whispers

Our proven model does not conclusively show that Perrigo is likely to beat earnings estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. This is not the case here as you will see below.

Zacks ESP: The Earnings ESP for Perrigo is 0.00% as both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at $1.62. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter .

Zacks Rank: Perrigo currently carries a Zacks Rank #4. As it is, we caution against Sell-rated stocks (#4 or 5) going into the earnings announcement.

Stocks That Warrant a Look

Here are some health care stocks that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this quarter.

BioMarin Pharmaceutical Inc. BMRN is expected to release results on Feb 23. The company has an Earnings ESP of +7.50% and a Zacks Rank #3. You can see the complete list of today's Zacks #1 Rank stocks here .

Acorda Therapeutics, Inc. ACOR is expected to release results on Feb 14. The company has an Earnings ESP of +5.56% and a Zacks Rank #3.

AMAG Pharmaceuticals, Inc. AMAG has an Earnings ESP of +3.23% and a Zacks Rank #3. The company is expected to release results on Feb 14.

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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.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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