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Perrigo Stock Lower; Results Hurt by Weak Cough-and-Cold Season

Perrigo swung to a second-quarter loss from a year-earlier profit, hurt by a weak cough-and-cold season. The stock is lower.
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Perrigo  (PRGO) - Get Perrigo Co. Plc Report shares on Wednesday dropped after the health-care-products company swung to a wider-than-expected second-quarter loss from a year-earlier profit, hurt by a weak cough-and-cold season.

And the chief executive, Murray Kessler, said in a statement that for the fiscal year Perrigo now expects "adjusted earnings per share towards the lower end of our guidance range as productivity improvements and Project Momentum cost savings are only expected to partially offset higher input costs, which we now see continuing into early next year. 

"For the first time in a number of years, price increases will also play a role in mitigating inflationary headwinds."

The stock of the Dublin company recently traded at $42.96, down 13%.

Perrigo registered a loss of $112 million, or 84 cents a share, for the second quarter, against a profit of $12 million, or 9 cents a share, in the year-earlier quarter.

The latest adjusted earnings were 50 cents a share, below the FactSet analyst consensus estimate of 60 cents.

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Revenue gained 3% to $981.1 million from $948.8 million. The latest figure lagged the consensus estimate of $1.02 billion.

Aside from the cough-and-cold segment, most others saw sales gains, the company said. That “bodes well for the second half,” Kessler said. 

He affirmed Perrigo's fiscal 2021 net sales guidance.

In March, Perrigo announced it’s unloading its generic-drug unit to Altaris Capital Partners for $1.55 billion, including $1.5 billion in cash.

The unit spelled trouble for Perrigo recently. Last year, 51 state and local attorneys general sued Perrigo and 25 other drug companies for conspiring to artificially inflate the prices of 80 topical generic drugs.

In addition to the cash, Altaris will assume more than $50 million in potential research and development milestone payments and contingent purchase obligations with third-party drug partners.

"The sale of our generic Rx business is the most impactful step in Perrigo's transformation plan,” Kessler said.