LONDON, UK / ACCESSWIRE / August 15, 2016 / Active Wall St. announces its post-earnings coverage on Perrigo Company PLC (NYSE: PRGO). The company announced its second quarter fiscal 2016 results on August 10, 2016. The over-the-counter drug specialist doubled its profit. However, the company slashed its full-year earnings forecast for the second time in 2016, citing pricing pressure in its generic drugs business. Register with us now for your free membership at: http://www.activewallst.com/register/.

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Earnings Reviewed

For the quarter ended July 2, 2016 Perrigo posted earnings of $194 million, or $1.35 per share, more than double earnings of $56 million, or $0.38 per share, in the year ago period. The earnings included a favourable impact of a $30 million reduction in the non-cash goodwill impairment recorded in Q1 FY16. The company's adjusted earnings came in at $1.93 per share, down from $2.18 per share, in the year earlier quarter. Net sales in the reported quarter declined 3% to $1.48 billion; the decline in revenue was attributed to lower sales in the company's Consumer Healthcare segment that was partially offset by higher sales in the Prescription Pharmaceuticals (Rx) division. Analysts were estimating earnings of $1.98 per share on $1.43 billion in revenue.

"Our financial results were below our expectations primarily due to competition and price erosion in the Rx business," commented John Hendrickson CEO, who took over the helm in May, 2016, after long-time CEO Joseph Papa resigned to take on the CEO role in early May at troubled Canadian drugmaker Valeant Pharmaceuticals International Inc.

Segment Details

During Q2 FY16, net sales in Perrigo's consumer healthcare segment declined 9% to $686 million. The segment's net sales were dragged down by a $84 million decline in sales of existing products, particularly in the cough/cold category as the past allergy season was relatively weak, particularly in the cough/cold category owing to a relatively weak allergy season as compared to last year, the timing of promotions, lower orders in the contract manufacturing business and the effects of relatively lower pricing in the analgesics category.

Sales in the company's Rx Pharmaceuticals unit rose 5% to $293 million in Q2 FY16 driven by $44 million related to recent product acquisitions and new product sales of $26 million. These were partially offset by a decrease in sales of existing products of $50 million due to price erosion across the portfolio and the lack of an exclusive market position for two key products versus the prior year.

For Q2 FY16, Perrigo recognised $90 million of royalty received related to global net sales of Biogen's multiple sclerosis drug Tysabri, in its Specialty Sciences Segment.

The Takeover Gone Wrong

Perrigo's performance has waned and its stock have been spiralling downward since the company's stockholders rejected a $26 billion bid from Netherlands-based Mylan N.V. in November 2015, that valued Perrigo at $26 billion. Management at the time asserted that the company's growth prospects would be better as a stand-alone entity. Perrigo has long been considered as a potential takeover target, with the company having a large portfolio of consumer products, infant formulas, and over-the-counter generic topical drugs.

Outlook

Perrigo, citing increasing competition and price erosion for its prescription pharmaceutical segment, is now projecting adjusted earnings per diluted share in the range of $6.85 to $7.15 for fiscal 2016 compared to its former guidance of $8.20 to $8.60 per share. Analysts were projecting earnings of $8.29 per share. Perrigo also said it is expecting lower performance from its branded-consumer-healthcare segment.

Stock Performance

At the close of the trading session on Friday, August 12, 2016, Perrigo's shares advanced 2.52% to close at $87.96. A total of 3.57 million shares were traded, which was higher than the 3 months average volume of 2.45 million shares.

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SOURCE: Active Wall Street