Perrigo Q4 Adj. Earnings Top Estimates, Sees FY14 Below View - Update

(RTTNews) - Healthcare and over-the-counter products maker Perrigo Co. (PRGO) Thursday reported an increase in fourth-quarter profit, reflecting about 16 percent growth in net sales. Adjusted earnings exceeded analysts' expectations, while revenues missed view. The company also forecast higher earnings per share for fiscal 2014, but below estimates.

Chairman and CEO Joseph Papa said, "I am pleased to report that Perrigo has delivered year-over-year record sales and adjusted earnings for the seventh straight fiscal year. This was a strong quarter where we continued to successfully drive growth across our segments, while managing costs to generate record bottom-line performance."

The company said it is actively working with regulators to receive approvals and clearances for Elan transaction, and expects to close the deal by the end of calendar year 2013.

It was on July 29, Perrigo announced a definitive agreement to acquire Irish biotechnology firm Elan Corp. Plc. (ELN) in a cash and stock transaction valued at about $8.6 billion.

In the fourth quarter, income from continuing operations increased to $118.5 million or $1.25 per share, from $107.1 million or $1.14 per share in the previous year. Excluding charges, adjusted income from continuing operations for the recent quarter totaled $1.57 per share, while the company posted $1.28 per share a year ago.

On average, 17 analysts polled by Thomson Reuters expected earnings per share of $1.56 for the quarter. Analysts' estimates typically exclude one-time items.

Net sales for the quarter climbed 16.3 percent to $967.2 million from $831.8 million a year earlier, but came below analysts' estimate of $999.08 million.

For fiscal year 2013, the company posted net income of $441.9 million or $4.68 per share, higher than $401.6 million or $4.27 per share a year ago. Adjusted earnings were $5.61 per share, compared to $4.99 per share in fiscal 2012. Annual net sales were $3.54 billion, an increase of 11.6 percent from the prior year.

Excluding the potential impact of the acquisition of Elan, the firm expects fiscal 2014 reported earnings for standalone Perrigo to be between $5.51 and $5.76 per share, and adjusted earnings to be between $6.35 and $6.60 per share.

This range implies a year-over-year growth rate in adjusted earnings of 13 to 18 percent over fiscal 2013, the firm stated. Analysts are currently looking for earnings of $6.66 per share for the fiscal year.

Perrigo anticipates that the purchase of Elan would be at least $0.10 accretive to the adjusted earnings per share of standalone Perrigo in fiscal 2014 and between $0.70 and $0.80 accretive in fiscal 2015, including synergies. PRGO is currently trading at $123.98, down $2.44 or 1.93 percent.