Perrigo (PRGO 71.63, +3.71) trades higher by 5.5% after beating bottom line expectations.
The drug maker reported above-consensus first quarter earnings of $1.05 per share on revenue of $1.19 billion, which declined 11.4% year-over-year, but matched market expectations.
Net sales of existing products were down $72 million year-over-year while the U.S. Vitamin, Mineral, and Supplement businesses generated revenue that was $47 million lower than a year ago. The exit from the European distribution businesses removed $38 million from revenue while lower contributions from Entocort reduced revenue by $25 million. Discontinued operations removed $13 million from revenue while unfavorable currency movements resulted in a $22 million impact. The declines were partially offset by $62 million in new product sales.
Perrigo Chief Executive Officer John Hendrickson said the company's results were in-line with internal expectations. The company plans to re-establish its foundation during 2017 and return to consolidated growth in 2018.
Gross margin ticked down to 38.89% from 39.57% one year ago.
Taking a glance at the segment breakdown, Consumer Healthcare Americas net sales fell 9.0% to $583 million while adjusted gross margin slipped to 34.5% from 34.6% one year ago. Adjusted operating margin declined to 20.2% from 20.4%.
Consumer Healthcare International net sales fell 15.0% to $375 million, but adjusted gross margin improved to 50.7% from 48.3%. Adjusted operating margin increased to 13.8% from 12.5%.
Prescription Pharmaceuticals net sales fell 12.0% year-over-year to $217 million while adjusted gross margin declined to 54.4% from 61.7% one year ago. Adjusted operating margin fell to 41.0% from 47.1% in 2016.
Looking ahead, Perrigo expects that earnings for the full year will be between $4.15 per share and $4.50 per share. Revenue is expected between $4.60 billion and $4.80 billion.