Perrigo Co. plc (NYSE: PRGO) lost money during the fourth quarter of 2015, the result of problems in its Branded Consumer Healthcare division.
Perrigo, based in Dublin, Ireland, and run from Allegan, today reported a $107.0 million net loss for the fourth quarter, or 74 cents per diluted share, on record revenues of $1.42 billion. That compares with net income of $70.2 million, or 51 cents per diluted share, on sales of $1.07 billion in the same period a year earlier.
The fourth quarter 2015 results included a $185 million charge for asset impairment in the Branded Consumer Healthcare division, created with the 2014 acquisition of Omega Pharma NV, a Belgian-based producer of over-the-counter (OTC) medications. The division had quarterly sales of $325.7 million and suffered an operating loss of $159.7 million.
“Although the segment did not meet our internal expectations, we are taking specific actions to address this performance,” Perrigo Chairman and CEO Joe Papa said in this morning’s earnings release. “We are confident that our durable business model and future growth prospects will continue to deliver value for our shareholders and provide quality affordable health care products to our customers and patients worldwide.”
Minus the impairment charge, Perrigo reported adjusted net income of $261.5 million, or $1.80 per adjusted diluted share.
Perrigo will seek to improve performance of the Branded Consumer Healthcare division “by taking select actions in the key areas of people, process and products.” That includes changing the management structure, implementing process improvements and conducting a product portfolio review “to exit slower growing or underperforming brands to reallocate these resources to higher growth products.”
“I am confident that these actions, when taken together, will result in improved operating performance and an acceleration of growth in the BCH segment,” Papa said. “I want to stress our commitment and conviction around the long-term prospects for the BCH business and the European OTC marketplace as a whole.”
For all of 2015, Perrigo reported sales of $5.35 billion, up 28 percent from 2014, with a net loss of $32.8 million, or 23 cents per share, and adjusted net income of $1.08 billion, or $7.59 per adjusted diluted share.
In guidance for 2016, Perrigo projected adjusted net income of $9.50 to $9.80 per diluted share.
The earnings report sent Perrigo’s shares falling this morning. As of 10:30 a.m., shares were down nearly 9 percent to $132.33 per share.