Tags: Perrigo | growth | OTC | PRGO

Perrigo Growth On OTC Medicine Business

By    |   Thursday, 22 Dec 2011 03:05 PM

Perrigo (PRGO) has been on a growth stock trajectory, with the share price gaining fivefold from December 2006 through December 2011. The company has propelled its growth in the healthcare business by focusing on the over-the-counter (OTC) medicines market.

Perrigo is a pharmaceutical company providing products to four market segments. Consumer Healthcare provides store-brand OTC medications; Nutritionals sells store-brand infant formulas; Rx produces generic topical prescription products; and API is the sales of active pharmaceutical ingredients.

Consumer Healthcare generates about 60 percent of revenues, followed by Nutritionals bringing in 18 percent. The bulk of company revenues come from North America, but the company manufactures and distributes on a global basis.

The Perrigo 2012 fiscal year first quarter closed on Sept. 24, 2011. For the quarter, the company reported revenue of $725 million, up 13 percent from $641 million for the 2011 first quarter. Adjusted net income per share for the quarter was $1.10 per share, up from 87 cents a year earlier.

The quarter's growth was driven by the Rx division, which saw sales increase 84 percent to $128 million. The increase was primarily due to the July 2011 acquisition of Paddock Labs.

Earnings guidance

With the first quarter earnings report, Perrigo issued earnings guidance for the full fiscal year. The company has forecast adjusted earnings per share in a range of $4.65 to $4.80. These figures put the earnings growth rate in the high teens, percentage wise, for the year.

The Perrigo business model takes medications which are coming off prescription status and makes them available to retail chains as store brand OTC medications. The market consists primarily of cold, cough, pain, allergy and smoking cessation products.

The company notes there is $10 billion in new sales potential for store brands over the next decade. Perrigo management expects to launch 45 new products in 2012.

Recently the analysts at Caris & Company upgraded Perrigo to buy from its previous above average rating. The analysts' target price is 30 percent above the current share price.

The company next reports on Jan. 26.

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Perrigo (PRGO) has been on a growth stock trajectory, with the share price gaining fivefold from December 2006 through December 2011. The company has propelled its growth in the healthcare business by focusing on the over-the-counter (OTC) medicines market. Perrigo is a...
Perrigo,growth,OTC,PRGO
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2011-05-22
Thursday, 22 Dec 2011 03:05 PM
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