New Products Drive Perrigo

February 11, 2007
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ALLEGAN — New product launches, particularly those in the smoking cessation category, boosted Perrigo Co. sales, but results were hampered by the acetaminophen recall in November and lower than anticipated demand for cough/cold and pain reliever products due to a mild cold and flu season through December.

Sales for the second quarter of fiscal 2007 were $370.6 million, up 3 percent over the second quarter of fiscal 2006. Net income was $21.1 million, or 23 cents per share, and included the $3.9 million in after tax costs for the product recall last fall, which amounted to 3 cents per share. Comparatively, net income was $25.4 million, or 27 cents per share, in the second quarter last year.

Sales for the first six months ended Dec. 30, 2006, were $710.8 million, an increase of 5 percent over the same period the year before. Net income was $38 million, or 41 cents per share, which included product recall expenses. Net income was basically on par with the first half of fiscal 2006.

Perrigo’s Consumer Healthcare segment sales were $275.9 million in the quarter, up from $270.2 million in the prior year’s second quarter. The segment racked up $19.5 million in new product sales led by the recently introduced mint-coated nicotine gum and nicotine lozenge products. Operating income was $17.4 million, compared with $31.4 million a year ago. For the first six months of the 2007 fiscal year, Consumer Healthcare sales were $517.8 million, versus $497.3 million for the first six months of 2006.

The Rx Pharmaceuticals segment reported sales of $28.3 million in the quarter compared with $28.6 million a year ago. Operating income was down from $5.3 million in the year ago quarter to $3.7 million in the just passed quarter.

The Israel Consumer Products and Israel Pharmaceutical and Diagnostic Products segments reported second quarter sales of $37.8 million, up 11 percent from a year ago. Operating income was $3 million compared to $1 million last year. Sales for the first six months were $75 million, or 6 percent higher than the first six months of 2006.

Perrigo anticipates earnings for the full fiscal year in the range of 86 cents to 91 cents per share.

“We will focus closely on monitoring production levels and costs in the second half of the fiscal year,” said President and CEO Joseph Papa. “We will maintain our increased investments in research and development as previously planned. Our long-term outlook continues to be positive as we focus on bringing important new products to market while we deliver value to our customers and their consumers.”    

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