Perrigo Q4 Results Beats View; But Sees 2015 Earnings Below Estimates

(RTTNews) - Drugmaker Perrigo Co. plc (PRGO) on Thursday reported an 11 percent increase in profit for the fourth quarter from last year as double-digit revenue growth more than offset higher restructuring charges and lower margins.

Both revenue and adjusted earnings per share for the quarter beat analysts' expectations. However, the company forecast earnings for fiscal 2015 below Street estimates.

The company's net income for the fourth quarter was $131.7 million, up from $118.5 million in the year-ago quarter. However, earnings per share declined to $0.98 from $1.25 in the prior-year quarter on higher number of shares outstanding in the latest quarter.

Excluding items, adjusted net income for the quarter was $234 million or $1.74 per share, compared to $148.1 million or $1.57 per share in the same period last year. On average, 17 analysts polled by Thomson Reuters expected the company to report earnings of $1.55 per share for the quarter. Analysts' estimates typically exclude special items.

Net sales for the quarter grew 18 percent to $1.14 billion from $967.2 million in the prior year. Analysts estimated revenues of $1.09 billion for the quarter.

The increase in net sales was driven primarily by new product sales of $65 million, $112 million in sales attributable to the acquisition of Elan Corp., and product acquisitions from Fera Pharmaceuticals, LLC as well as Aspen Global Inc.

Consumer Healthcare segment net sales for the quarter rose 8 percent from last year to $606.9 million. Meanwhile, Nutritionals segment net sales decreased 3 percent to $145.2 million.

In the Rx Pharmaceuticals segment, net sales grew 30 percent to $253.4 million, while API segment's net sales declined 21 percent from last year to $32.5 million.

Total operating expenses advanced 24 percent to $218.3 million from $176.1 million a year ago. For the recent quarter, the company recorded restructuring charges of $10.5 million, compared to $2.9 million last year.

Gross margin for the quarter contracted 50 basis points to 36.3 percent, while operating margin contracted 130 basis points to 17.3 percent.

For fiscal 2014, Perrigo's net income was $205.3 million or $1.77 per share, down from $441.9 million or $4.68 per share in the previous year. Adjusted net income for the year was $739.5 million or $6.39 per share, compared to $529.7 million or $5.61 per share last year.

Net sales for the year increased 15 percent to $4.06 billion from $3.54 billion in the prior year.

Street expected the company to earn $6.20 per share for the year on revenues of $4.01 billion.

Looking ahead to fiscal 2015, Perrigo forecasts reported earnings of $4.02 to $4.32 per share and adjusted earnings of $7.20 to $7.50 per share. The adjusted earnings outlook represents an increase of 13 to 17 percent over last year.

Analysts expect the company to earn $7.53 per share for the year on revenues of $4.51 billion.

Joseph Papa, Perrigo's Chairman, President and CEO said, "We enter fiscal 2015 excited about the prospects for our durable business model and plan to grow adjusted net income between 31% and 37% year-over-year. We expect to launch greater than $235 million in new products, including multiple products that have recently switched from prescription to OTC status, and are enthusiastic about the number of categories currently being considered to switch."

PRGO closed Wednesday's trading at $139.15. In Thursday's pre-market trades, the stock is up $6.85 or 4.92 percent to $146.00.