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Perrigo (PRGO) to Report Q2 Earnings: What's in the Cards?

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Perrigo Company plc (PRGO - Free Report) will report second-quarter 2022 results on Aug 9, before market open. In the last reported quarter, the company delivered a negative earnings surprise of 21.43%.

Perrigo’s shares have risen 9.6% so far this year against the industry’s decline of 41.4%.

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Perrigo’s earnings performance has been dismal over the trailing four quarters. The company’s earnings missed estimates in three of the last four quarters and beat the same once, delivering an average negative earnings surprise of 15.77%.

Let’s see how things have shaped up for this announcement.

Factors at Play

In the second quarter, the performance of Perrigo’s Consumer Self Care Americas (“CSCA”) and Consumer Self Care International (“CSCI”) segments is expected to have been aided by the products added through acquisitions. Significant sales growth of new products is likely to have boosted sales further during the soon-to-be-reported quarter. Currency movements are likely to have hurt sales growth during the second quarter.

During the quarter, the company completed the acquisition of HRA Pharma, a leading global self-cared company. Upon completion of the acquisition, Perrigo raised its financial outlook for 2022. The company expects the EPS to increase by approximately 35 cents for the full year.

Sales of cough/cold products had demonstrated a strong recovery during the last three quarters. The momentum is expected to have continued during the second quarter, boosting the top line.

Perrigo reported higher net price realization for its products during the first quarter. The improving price trend is likely to get reflected in the company’s second-quarter sales, benefiting the top line. This increasing price is likely to partially offset cost headwinds (including the higher cost of goods sold), unfavorable currency movements and loss of sales in Russia and Ukraine, leading to lower operating margins.

Loss of sales due to discontinued products and the exited businesses might have partially offset the gain from the new products.

Investors are likely to ask questions about potential product launches in the second half of 2022 and in 2023 and provide an update on the expected impact of COVID-19 in 2022.

Earnings Whispers

Our proven model does not predict an earnings beat for Perrigo this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. Unfortunately, that is not the case here, as you will see below. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter. You can see the complete list of today’s Zacks #1 Rank stocks here.

Earnings ESP: Perrigo has an Earnings ESP of 0.00% as the Most Accurate Estimate and Zacks Consensus Estimate both stand at 43 cents per share.

Zacks Rank: Perrigo has a Zacks Rank #4 (Sell), currently.

 

Stocks to Consider

Here are a few stocks worth considering from the healthcare space, as our model shows that these have the right combination of elements to beat on earnings this reporting cycle.

ADC Therapeutics (ADCT - Free Report) has an Earnings ESP of +0.78% and a Zacks Rank of 3.

In the last reported quarter, ADC Therapeutics’ earnings beat estimates and reported a positive earnings surprise of 52.63%.

ADC Therapeutics’ performance has been pretty encouraging to date, with its earnings exceeding expectations in each of the trailing four quarters, the average being 40.91%. Shares of ADCT have plunged 65.1% this year so far.

Angion Biomedica (ANGN - Free Report) has an Earnings ESP of +9.19% and a Zacks Rank #3.

Angion Biomedica’s stock has plunged 63.1% this year so far. ANGN’s earnings topped estimates in three of the last four quarters and missed the mark on one occasion. Angion Biomedicahas a trailing four-quarter earnings surprise of 58.14%, on average.

In the last reported quarter, Angion Biomedica’s earnings missed estimates and reported a negative earnings surprise of 9.09%.

Ionis Pharmaceuticals (IONS - Free Report) has an Earnings ESP of +27.61% and a Zacks Rank #2.

Ionis Pharmaceuticals’ stock has risen 23.2% this year so far. IONS’ earnings topped estimates in two of the last four quarters and missed the mark on the other two occasions. Ionis Pharmaceuticals has a trailing four-quarter earnings surprise of 24.35%, on average.

In the last reported quarter, IONS’ earnings beat estimates and reported a positive earnings surprise of 32.35%. Ionis Pharmaceuticals is scheduled to release second-quarter 2022 results on Aug 9.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.