Acquisitions help lift Perrigo 4Q net income

Ahead of Elan purchase, Perrigo says previous acquisitions helped its 4th-quarter net income

Associated Press

ALLEGAN, Mich. (AP) -- Drugmaker Perrigo said Thursday that acquisitions boosted its net income in the fiscal fourth quarter as it prepared to buy Irish pharmaceutical company Elan for $8.6 billion.

Perrigo said its net income rose 11 percent in the quarter ended June 29, and its revenue rose 16 percent. Perrigo bought Sergeant's Pet Care Products in late 2012, and earlier this year it bought Rosemont Pharmaceuticals and Velcera Inc., which makes the flea and tick treatment PetArmor. In July Perrigo said it would buy Elan in a deal that is expected to boost its revenue and cut its tax bills.

Perrigo Co. said its fourth-quarter net income grew to $118.5 million, or $1.25 per share, from $107.1 million, or $1.14 per share. The company said it earned $1.57 per share if one-time items are excluded. Revenue increased to $967.2 million from $831.8 million.

Analysts were expecting earnings of $1.56 per share and $1 billion in revenue, according to FactSet. Shares of Perrigo lost $2.64, or 2.1 percent, to $123.78 in midday trading.

Perrigo said revenue from its consumer health care business, which makes over-the-counter pharmaceuticals, grew 16 percent to $562.5 million. Prescription drug revenue increased 24 percent to $194.7 million and nutritional revenue rose 11 percent to $149.7 million.

For the fiscal year, Perrigo said its net income rose 10 percent, to $441.9 million, or $4.68 per share, from $401.6 million, or $4.27 per share. Revenue rose 12 percent, to $3.54 billion from $3.17 billion.

The company said it expects to earn between $6.35 and $6.60 per share in fiscal 2014 if one-time items are excluded. It said the purchase of Elan should add at least 10 cents per share to its net income. It said the combination with Elan should increase its net income by 70 to 80 cents per share the following year including expected cost savings.

Analysts expect Perrigo to report net income of $6.69 per share in the new fiscal year.

Perrigo is the biggest maker of generic drugs for major retail chains in the United States, including Walgreens and Wal-Mart. Over the last decade it has expanded its overseas business. By buying Elan Corp. PLC, Perrigo will gain royalties from drugs Elan helped develop, particularly the multiple sclerosis fighter Tysabri. The company hopes to cut its tax liabilities nearly in half by relocating to Ireland.

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