Perrigo Increases Sales but Misses Estimates on Earnings

Perrigo (NAS: PRGO) reported earnings on Feb. 7. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Dec. 31 (Q2), Perrigo beat expectations on revenues and missed expectations on earnings per share.

Compared to the prior-year quarter, revenue increased significantly and GAAP earnings per share improved.

Gross margins expanded, operating margins expanded, and net margins dropped.

Revenue details
Perrigo chalked up revenue of $838.2 million. The 13 analysts polled by S&P Capital IQ predicted revenue of $811.1 million. Sales were 17% higher than the prior-year quarter's $717.5 million.


Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions.

EPS details
Non-GAAP EPS came in at $1.07. The 11 earnings estimates compiled by S&P Capital IQ forecast $1.15 per share on the same basis. GAAP EPS of $1.06 for Q2 were 10% higher than the prior-year quarter's $0.96 per share.


Source: S&P Capital IQ. Quarterly periods. Figures may be non-GAAP to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 35.2%, 30 basis points better than the prior-year quarter. Operating margin was 19.2%, 70 basis points better than the prior-year quarter. Net margin was 11.9%, 70 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $836.5 million. On the bottom line, the average EPS estimate is $1.22.

Next year's average estimate for revenue is $3.23 billion. The average EPS estimate is $4.68.

Investor sentiment
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 384 members out of 411 rating the stock outperform, and 27 members rating it underperform. Among 92 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 88 give Perrigo a green thumbs-up, and four give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Perrigo is hold, with an average price target of $102.64.

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At the time this article was published Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor ofMotley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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