Perrigo Earnings Tops Estimates; Stock Up - Update

(RTTNews) - Generic drug maker Perrigo Co. (PRGO), Thursday reported a better-than-expected increase in first-quarter profit, helped by double-digit sales growth, partly offset by amortization expenses.

The company affirmed its adjusted earnings expectations for 2014, sending its shares up 7 percent on the New York Stock Exchange.

CEO Joseph Papa said Perrigo recorded organic growth across all segments during the quarter. He indicated the company is striving to close the $8.6 billion acquisition of Elan Corp.

Allegan, Michigan-based Perrigo posted first-quarter net income of $111.4 million or $1.18 per share, compared with $105.6 million or $1.12 per share last year.

Results for the recent quarter include $0.31 per share in amortization and transaction-related costs.

Excluding items, adjusted earnings for the quarter were $144 million or $1.52 per share, compared with $119.5 million or $1.27 per share a year ago. On average, 15 analysts polled by Thomson Reuters expected earnings of $1.41 per share. Analysts' estimates typically exclude special items.

Sales for the quarter climbed 21 percent to $933.4 million from $770 million in the prior year. Thirteen analysts had a consensus sales estimate of $900.1 million.

Growth was mainly due to contributions from Sergeant's Pet Care Products Inc., Rosemont Pharmaceuticals Ltd., Velcera Inc. and Fera Pharmaceuticals LLC acquisitions, new product sales and base business growth.

Among segments, consumer healthcare sales climbed about 20 percent year-over-year. Nutritional and Rx Pharmaceuticals segment sales each gained 25 percent.

Margins for the quarter expanded 110 basis points from a year ago.

For fiscal year 2014, Perrigo still expect adjusted earnings of $6.35 to $6.60 per share, excluding the impact of the Elan Corp. acquisition. Analysts expect earnings of $6.55 per share for the year.

In July, Perrigo agreed to acquire Irish biotechnology firm Elan Corp. (ELN) in a cash and stock deal valued at about $8.6 billion.

Perrigo still expects the acquisition of Elan Corp. to be at least $0.10 accretive to the adjusted earnings per share of standalone Perrigo in 2014 and between $0.70 and $0.80 accretive in 2015.

Perrigo stock is trading at $137.82 , up $9.20 or 7.15%, on a volume of 2.5 million shares. In the past year, the stock traded in the range of $98.79 - $137.80.