Earnings Review and Free Research Report: Perrigo Reported Better than Expected Revenue and Earnings Results
Research Desk Line-up: USANA Health Sciences Post Earnings Coverage
LONDON, UK / ACCESSWIRE / August 21, 2017 /Pro-Trader Daily has just published a free post-earnings coverage on Perrigo Co. PLC (NYSE: PRGO), which can be viewed by registering at http://protraderdaily.com/optin/?symbol=PRGO, following the Company's announcement of its second quarter fiscal 2017 operating results on August 09, 2017. The drug Company's adjusted revenue grew 2% on a y-o-y basis, while it raised its adjusted earnings guidance for fiscal 2017. Our daily stock reports are accessible for free, and with those to look forward today you also will be signing up for a complimentary member's account at:
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For the quarter ended July 01, 2017, Perrigo recorded net sales of $1.24 billion compared to net sales of $1.34 billion in Q2 2016. The Company's adjusted net sales grew 2% on a y-o-y basis excluding net sales from the VMS business of $42 million, which was sold in Q3 2016; net sales from the European distribution businesses of $39 million, which the Company exited in 2016; lower y-o-y net sales of $26 million from Entocort®; and unfavorable foreign currency movements of $16 million. Perrigo's revenue topped analysts' expectations of $1.18 billion
For Q2 2017, Perrigo's reported net loss was $70 million, or $0.49 per share, versus net loss of $534 million, or $3.73 per diluted share, in Q2 2016. On an adjusted basis, the Company posted adjusted net income of $175 million, or $1.22 per diluted share, versus adjusted net income of $185 million, or $1.29 per diluted share, for the year earlier corresponding quarter. Perrigo's earnings exceeded Wall Street's estimates of $0.92 per share.
For Q2 2017, Perrigo's Consumer Healthcare Americas (CHCA) segment's net sales were $605 million compared to $630 million in Q2 2016. Excluding $42 million from VMS in the prior year, adjusted net sales grew 3%. This increase was driven by higher sales in the smoking cessation and dermatologic categories and stronger performance in the Company's Mexico business. CHCA segment's new product sales of $13 million were led by continued strong net sales of the store brand version of Flonase®.
The CHCA segment achieved gross profit margin of 33.7% and adjusted gross profit margin of 35.7% in Q2 2017. Sell through of higher margin products in the prior year and y-o-y price erosion in certain categories were partially offset by positive contributions from supply chain and manufacturing efficiencies. The Company's operating margin was 17.2% and adjusted operating margin was 21.0% for the quarter under review, which was lower compared to the prior year due to lower gross margin flow.
For Q2 2017, Consumer Healthcare International (CHCI) segment's net sales decreased 9% to $377 million compared to net sales of $416 million in Q2 2016. The segment's net sales grew approximately 4%, excluding $39 million from the exited unprofitable European distribution businesses and unfavorable foreign currency movements of $16 million. This increase was driven by new product sales of $19 million and higher net sales in the allergy, analgesic, and cough and cold categories.
For the reported quarter, CHCI segment's reported gross margin was 46.2%, an increase of 110 bps over the previous year, while adjusted gross margin was 51.7%, an increase of approximately 230 bps over the previous year as the Company exited the unprofitable distribution businesses. The division's operating margin was 1.0% compared to 0.1% in the prior year's same quarter, while adjusted operating margin was 14.6%, which included higher advertising and promotional investments as a percentage to net sales and lower operating expenses.
During Q2 2017, Perrigo's Prescription Pharmaceuticals (RX) segment reported net sales of $240 million, a 13% decrease compared to net sales of $277 million in Q2 2016 due to lower y-o-y Entocort® net sales of $26 million and lower sales of other existing products of $14 million, due primarily to price erosion.
The RX division's adjusted gross margin was 58.8%, 200 bps higher than the prior year as sales of higher margin products and a reduced level of floor stock adjustments more than offset Entocort® competition and price erosion. The segment's operating margin was 28.8%, while adjusted operating margin was 46.5%, 370 bps higher than the prior year and adjusted operating income grew by 21%, or $19 million, excluding the effect of Entocort®.
For FY17, Perrigo is forecasting diluted EPS to be in the range of $0.84 to $1.09. The Company also raised its adjusted diluted EPS guidance to be in the range of $4.45 to $4.70.
On Friday, August 18, 2017, the stock closed the trading session at $77.27, marginally falling 0.54% from its previous closing price of $77.69. A total volume of 1.45 million shares have exchanged hands. Perrigo's stock price advanced 2.33% in the last one month and 9.15% in the past three months. The stock has a dividend yield of 0.83%. The stock currently has a market cap of $11.08 billion.
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