ALLEGAN — Perrigo Co. plc grew sales 5.1 percent in the third quarter, exceeding expectations and showing that a strategic plan President and CEO Murray Kessler put in place in the spring to improve sales and earnings is gaining traction.
Perrigo (Nasdaq: PRGO) today reported quarterly sales of $1.19 billion for the three-month period that ended Sept. 28. That compares to sales of $1.13 billion in the same period a year earlier. Minus revenue from business Perrigo has sold and foreign currency translations, Perrigo’s adjusted net sales grew 10 percent.
Quarterly net income totaled $92.2 million, or 67 cents per diluted share, which compares to a net loss of $67.5 million, or 49 cents per diluted share, in the third quarter of 2018. Minus one-time charges, Perrigo recorded third quarter adjusted net income was $142 million, or $1.04 per diluted share.
Kessler told brokerage analysts in a conference call this morning that for the first time in his tenure as Perrigo CEO, which began a year ago, he could say he was pleased with quarterly results.
“What differentiates this quarter is that our top line is growing again as many of the initiatives we implemented as part of our strategic plan are beginning to take effect,” Kessler said. “This is the first quarter I can stand up here and be proud that the growth numbers are starting to come as we were working toward.”
Perrigo’s largest division, Consumer Self-Care Americas that produces store-brand, over-the-counter products, grew sales 9 percent for the quarter to $613.3 million, including $54 million from the July acquisition of Grand Rapids-based Ranir Global Holdings LLC, a maker of oral care products.
Quarterly sales for Perrigo’s Consumer Self-Care International business grew 10 percent to $347.5 million. Sales for the generic drugs division grew 13.6 percent to $230.3 million.
The quarterly results led Perrigo, based in Allegan but run from Dublin, Ireland, to raise adjusted net income guidance to $3.85 to $4.05 per share, from $3.75 to $4.05 per share previously.
“We still have a lot to do to be able to consistently report this type of growth, but we’re heading in the right direction,” Kessler said.
Perrigo’s sales through the first three quarters of 2019 totaled $3.51 billion, down slightly from the same period in 2018, with year-to-date net income of $165.1 million, or $1.21 per diluted share.
Kessler told analysts that innovation on new products is “ramping up significantly” after Perrigo consolidated R&D into a single team that shares ideas, and that “you should expect innovation across all of our businesses in the coming year.”
As sales and earnings rebound, Perrigo will pursue further acquisitions to supplement growth, although probably not at the scale of the $750 million deal for Ranir Holdings. The acquisition of Ranir “would be sort of the high side of where we’re going” based on cash flow and leveraging debt, Kessler said
“I do have an appetite for continued bolt-on M&A,” he said. “I’m going to go after bolt-on opportunities that give us repeatable growth platforms.”