Here’s why Perrigo shares are down more than 10% on Wednesday

By: Wajeeh Khan
Wajeeh Khan
Wajeeh is an active follower of world affairs, technology, an avid reader, and loves to play table tennis in… read more.
on Aug 11, 2021
  • Perrigo Co plc swung to a loss in its fiscal second quarter.
  • The pharmaceuticals firm gave a weak guidance for the future.
  • Shares of the company tanked more than 10% on Wednesday.

Perrigo Co plc (NYSE: PRGO) said on Wednesday it concluded its fiscal second quarter in loss. The NYSE-listed shares of the company were down more than 10% this morning on weak guidance for the future.

Financial performance

Perrigo reported $112 million of loss that translates to 84 cents per share. In the comparable period of last year, it had posted $12 million of net income or 9 cents per share. On an adjusted basis, Perrigo earned 50 cents per share in the second quarter.

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The $6.57 billion company valued its sales at $981.1 million – an increase from $948.8 million last year. According to FactSet, analysts had forecast $1.018 billion of sales and 60 cents of adjusted EPS.

Full-year guidance

For the full financial year, Perrigo had previously estimated $2.50 to $2.70 of adjusted per-share earnings. After Q2 results on Wednesday, the company now warned that its adjusted EPS this year will print closer to the lower end of the guided range only.

In separate news from the United States, Wendy’s also reported its quarterly financial results on Wednesday.

CEO Kessler’s remarks

According to CEO Murray S. Kessler, Perrigo noted growth at most of its businesses in the second quarter. The U.S. over-the-counter market, however, remained weak in recent months on a weak cough/cold season and inventory reductions (year over year). The Dublin-headquartered OTC pharmaceuticals manufacturer generates roughly 70% of its sales from the U.S.

“Most importantly, consumer take away rebounded sharply in Q2 on all businesses including cough/cold, according to IRI MULO, which bodes well for the second half. The decline in earnings this quarter was the result of these factors, the reinstatement of brand building support to pre-COVID-19 levels and higher input costs,” Kessler said.

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