It has been about a month since the last earnings report for Perrigo CompanyPRGO . Shares have added about 5% in that time frame, outperforming the market.
Will the recent positive trend continue leading up to the stock's next earnings release, or is it due for a pullback? Before we dive into how investors and analysts have reacted of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Perrigo's First Quarter Earnings Beat Estimates, Guidance Intact
Perrigo reported first-quarter 2017 earnings of $1.05 per share which beat the Zacks Consensus Estimate of $0.98 per share by 7.1%. However, adjusted earnings declined 20.5% from the year-ago figure.
The company also reported earnings of $0.50 per share of the same period, including amortization and restructuring charges and other one-time items. The figure is down 114% year over year.
Net sales in the reported quarter dropped to $1.19 billion by 11.4%, primarily due to lower contribution from sales of existing products. In addition, divestures of some businesses and currency headwinds hurt the top-line. But revenues surpassed the Zacks Consensus Estimate of $1.18 billion.
CHCA: CHCA net sales in the first quarter of 2017 came in at $583 million, down 9% due to sale of the vitamins, minerals and supplements (VMS) business, which had contributed to segmental sales in the prior year.
Though the company reported higher cough and cold product sales in the quarter, these were offset by lower sales of existing products primarily in antacids, smoking cessation and infant nutrition categories.
CHCI: CHCI segment reported net sales of $375 million, down 15% (declined 10% on a constant-currency basis) from the year-ago period. Excluding year-over-year contributions from the divested European distribution businesses and currency headwinds, organic net sales decreased approximately 2% due to lower sales of existing products.
Net sales of existing products decreased primarily due to lower sales in Germany and Belgium and discontinued products from divested businesses.
Prescription Pharmaceuticals (RX): The Prescription Pharmaceuticals segment also showed a sluggish performance during the quarter, with net sales declining 12% to $267 million, both on a reported and constant-currency basis. The dip in sales can be attributed to lower sales of Entocort due to competitive pressures and price erosion. Lower sales of existing products also affected revenues.
2017 Earnings Outlook Intact
Perrigo maintained its previously issued 2017 earnings outlook. The company continues to expect 2017 net sales in the range of $4.6 to $4.8 billion.
The company expects adjusted earnings per diluted share in the range of $4.15 to $4.50 in 2017.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed a downward trend in fresh estimates. There have been two revisions higher for the current quarter compared to seven lower. In the past month, the consensus estimate has shifted lower by 6% due to these changes.
Perrigo Company Price and Consensus
At this time, Perrigo's stock has a subpar Growth Score of 'D'. It is lagging a bit on the momentum front with an 'F'. However, the stock was allocated a grade of 'C' on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregte VGM Score of 'D'. If you aren't focused on one strategy, this score is the one you should be interested in.
The company's stock is suitable solely for value investors based on our style scores.
Estimates have been broadly trending downward for the stock. The magnitude of this revision also indicates a downward shift. Notably, the stock has a Zacks Rank #3 (Hold). We expect in-line returns from the stock in the next few months.