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It has been about a month since the last earnings report for Perrigo Company plc PRGO. Shares have added about 4.7% in that time frame.
Will the recent positive trend continue leading up to its next earnings release, or is PRGO due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Perrigo Surpassed Earnings in Q4, Revenues Down Y/Y
Perrigo Company reported fourth-quarter 2017 adjusted earnings of $1.28 per share, which beat the Zacks Consensus Estimate of $1.24 by 3.2%. The bottom line also increased 3.2% from the year-ago figure.
Net sales in the reported quarter declined 3.6% to $1.28 billion as divestitures of some businesses hurt the top line. But the metric surpassed the Zacks Consensus Estimate of $1.25 billion. Moreover, excluding the impact of divestitures, sales nudged up 2.1% year over year.
Segment Discussion
CHCA: CHCA net sales in the fourth quarter of 2017 came in at $644 million, up 2.7% year over year. This upside can be attributed to a strong performance from the gastrointestinal and analgesics categories compared with the year-ago quarter. New product sales of $17 million also contributed to the top line, led by the store brand version of Nexium, launched last September, and smoking cessation products.
However, this upside was partially offset by lower sales from nutritional drink products in the infant nutrition category as well as pricing pressure in certain OTC (over the counter) categories.
CHCI:CHCI segment reported net sales of $374 million, down 10.8% (declined 16.9% on a constant-currency basis) from the year-ago period. Excluding contributions from the divested European distribution businesses and favorable currency movements, organic net sales increased approximately 3.3% owing to higher sales of new products.
The company also witnessed higher new product sales in the personal care category as well as the store brand business in the U.K. However, this was partially offset by lower net sales in the anti-parasite category.
Prescription Pharmaceuticals (RX): The Prescription Pharmaceuticals segment net sales slipped 1.7% to $261 million on a reported basis and 1.8% on a constant-currency basis. This sales dip can be attributed to lower sales of Entocort due to competitive pressures and price erosion.
2017 Results
Full-year sales decreased 6.3% year over year to $4.9 billion. The metric was however, in line with both the Zacks Consensus Estimate and preliminary results.