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We expect Perrigo Company (PRGO - Analyst Report) to report in line third quarter fiscal 2013 results before the opening bell on May 7. The company’s fiscal year ends on the last Saturday of Jun every year.

Factors to Consider

Perrigo has lately been quite active on the acquisition front. On Apr 1, 2013 Perrigo announced the completion of the acquisition of companion animal health company, Velcera.

The deal, which has strengthened Perrigo’s position in the over-the-counter (OTC) retail pet healthcare market, is encouraging. The acquisition adds erstwhile Velcera’s PetArmor franchise of Flea and Tick therapies to Perrigo’s product portfolio.

In Feb 2013, Perrigo acquired UK-based privately held pharmaceutical company, Rosemont Pharmaceuticals Ltd. By acquiring Rosemont Pharma, Perrigo aims to strengthen its position in the UK oral liquid formulations space. We are impressed by Perrigo’s growth-by-acquisition strategy.

In Mar 2013, Perrigo commenced the shipping of its generic version of Adams Respiratory Therapeutics’ expectorant Mucinex (600mg extended-release tablets). Adams Respiratory Therapeutics is a subsidiary of Reckitt Benckiser Group. The launch of the store brand version of Mucinex further strengthens its dominant position in the store brand OTC drug market. We note that Perrigo competes with players like Dr. Reddy‘s Laboratories, Ltd. (RDY - Analyst Report) and Actavis Inc. (ACT - Analyst Report) in the store brand space.

Earnings Whispers?

Our proven model does not conclusively show that Perrigo is likely to beat earnings estimates this quarter. This is because a stock needs to have both a positive earnings Expected Surprise Prediction (ESP) (Read: Zacks Earnings ESP: A Better Method) and a Zacks Rank #1, 2 or 3 for this to happen.

Zacks ESP: The ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is 0.00%. This is because both the Most Accurate Estimate and Zacks Consensus Estimate currently stand at $1.44 per share.

Zacks Rank #3 (Hold): Perrigo’s Zacks Rank #3 lowers the predictive power of ESP because the Zacks Rank #3 when combined with an ESP of 0.00% indicates the possibility of in line results.

We expect Onyx Pharmaceuticals, Inc. to post earnings beat this season as it has the right combination of elements to do so. Onyx has an Earnings ESP of +16.95% and carries a Zacks Rank #2 (Buy).

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