Perrigo Company plc (PRGO) swung to a net loss for the quarter ended Oct. 01, 2016. The company has made a net loss of $1,255.20 million, or $ 8.76 a share in the quarter, against a net profit of $112.60 million, or $0.77 a share in the last year period. On the other hand, adjusted net income for the quarter stood at $236.30 million, or $1.65 a share compared with $258.30 million or $1.76 a share, a year ago.
Revenue during the quarter went up marginally by 0.76 percent to $1,354.90 million from $1,344.70 million in the previous year period. Gross margin for the quarter contracted 344 basis points over the previous year period to 37.37 percent.
Operating loss for the quarter was $1,515.20 million, compared with an operating income of $188.60 million in the previous year period.
However, the adjusted operating profit for the quarter stood at $344 million.
Perrigo’s CEO John T. Hendrickson commented, "Every segment delivered year-over-year net sales growth, excluding net sales from held-for-sale businesses. The CHC team again delivered a solid quarter with attractive margins. While reported net sales within the U.S. Consumer Healthcare business were flat year-over-year, adjusted net sales grew approximately 4%. In addition, I am pleased with the changes implemented in the Rx segment, where our productivity improvements in the quarter partially offset the effect of the competitive pricing environment. Despite lower margins year-over-year and the impairment realized this quarter, the BCH segment’s net sales were consistent with the prior year. This segment remains a top priority for our team. In addition, our business model continues to deliver strong cash flow conversion, generating $304 million of operating cash flows in the quarter."
For financial year 2016, the company forecasts diluted loss per share to be in the range of $9.04 to $9.34. For financial year 2016, the company forecasts diluted earnings per share to be in the range of $6.85 to $7.15 on adjusted basis.
Working capital declines
Perrigo Company plc has witnessed a decline in the working capital over the last year. It stood at $1,087 million as at Oct. 01, 2016, down 10.87 percent or $132.60 million from $1,219.60 million on Sep. 26, 2015. Current ratio was at 1.71 as on Oct. 01, 2016, down from 1.73 on Sep. 26, 2015.
Cash conversion cycle (CCC) has decreased to 58 days for the quarter from 62 days for the last year period. Days sales outstanding went down to 38 days for the quarter compared with 42 days for the same period last year.
Days inventory outstanding has decreased to 47 days for the quarter compared with 51 days for the previous year period. At the same time, days payable outstanding went down to 27 days for the quarter from 31 for the same period last year.
Debt moves up
Perrigo Company plc has witnessed an increase in total debt over the last one year. It stood at $5,903 million as on Oct. 01, 2016, up 9.82 percent or $528 million from $5,375 million on Sep. 26, 2015. Total debt was 33.79 percent of total assets as on Oct. 01, 2016, compared with 27.28 percent on Sep. 26, 2015. Debt to equity ratio was at 0.68 as on Oct. 01, 2016, up from 0.50 as on Sep. 26, 2015.
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