Yahoo Finance Perrigo (PRGO) Lags on Q3 Earnings & Sales, Lowers '22 EPS View
Perrigo Company plc PRGO reported third-quarter 2022 adjusted earnings of 56 cents per share, which missed the Zacks Consensus Estimate of 66 cents. However, earnings were up 24.4% year over year. Unfavorable currency movements and higher operating expenses hurt earnings in the quarter, which was offset by strategic pricing initiatives undertaken by management. Excluding the negative currency impact, earnings rose 44.4%.
Net sales increased 5.5% year over year to $1.10 billion but missed the Zacks Consensus Estimate of $1.14 billion. Excluding the negative currency impact, earnings rose 12.3%. The upside was driven by sales from the newly-acquired HRA Pharma, strong demand for cough/cold products globally and higher demand for infant formula in the United States. These were partially offset by unfavorable currency movements and divested Latin American businesses. Organic net sales (excluding the effects of acquisitions and divestitures and the impact of currency) were up 7.7% year over year.
Segment Discussion
Perrigo reports its results under the following segments — Consumer Self Care Americas (“CSCA”) and Consumer Self Care International (“CSCI”). Per management, the company gained market share in both business segments during the quarter, as compared to the year-ago period.
CSCA: Net sales of the segment in the third quarter of 2022 came in at $722.3 million, up 4% year over year. Sales increased due to strategic price increases, strong demand for store-brand infant formula and new product launches.
CSCI: The segment reported net sales of $377.9 million, up 8.4% from the year-ago period. At constant-currency (cc) rates, sales were up 28.6% year over year. Organically sales increased 8.3%. Segment revenues benefitted from the higher sales of HRA Pharma brands, strong demand for cough/cold products and Women’s Health products, partially offset by lower sales of products from the Healthy Lifestyle category. Sales were negatively impacted by unfavorable currency movement.
2022 Guidance Revised
Perrigo lowered its earnings guidance for 2022. The company now expects adjusted earnings per share in the range of $2.00-$2.10, down from the previous guidance of $2.25-$2.35, to account for the worse-than-previously-expected impact of currency translation.
Shares of Perrigo were down 7% in pre-market trading on Nov 8, likely due to a slash in earnings guidance for the full year. The stock has gained 1% this year against the industry’s decrease of 47.5%.
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Management reaffirmed total revenues in 2022 to grow 8.5%-9.5%. The company also reiterated its guidance for organic growth between 9-10%.
Perrigo Company plc Price
Perrigo Company plc price | Perrigo Company plc Quote
Zacks Rank & Stocks to Consider
Perrigo currently has a Zacks Rank #4 (Sell).
Some better-ranked stocks in the overall healthcare sector include Angion Biomedica ANGN, Gilead Sciences GILD and Vertex Pharmaceuticals VRTX. While Angion Biomedica sports a Zacks Rank #1 (Strong Buy), Gilead and Vertex each carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Estimates for Angion Biomedica’s 2022 loss per share have narrowed from $1.64 to $1.53 in the past 60 days. Angion’s loss estimates for 2023 have narrowed from $1.54 to $1.43 in the past 60 days. Shares of Angion Biomedica have plunged 69.1% in the year-to-date period.
Earnings of Angion Biomedica beat estimates in three of the last four quarters and missed the mark on one occasion, the average surprise being 62.85%. In the last reported quarter, Angion Biomedica delivered an earnings surprise of 34.78%.
Gilead’s stock has risen 10.7% this year so far. While Gilead’s earnings estimates for 2022 have risen from $6.61 to $7.02 per share in the past 60 days, estimates for 2023 have increased from $6.32 to $6.79 per share during the same period.
Gilead beat earnings estimates in three of the last four quarters and missed the mark on one occasion, the average surprise being 0.36%. In the last reported quarter, Gilead delivered an earnings surprise of 31.94%.
Vertex’s stock has risen 40.6% this year so far. While Vertex’s earnings estimates for 2022 have risen from $14.21 to $14.61 per share in the past 60 days, estimates for 2023 have increased from $15.12 to $15.60 per share during the same period.
Vertex beat earnings estimates in three of the last four quarters and missed the mark on one occasion, the average surprise being 3.16%. In the last reported quarter, Vertex reported an earnings surprise of 8.67%.
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