Most stocks have recovered nicely from the market meltdown earlier this year, but not Perrigo (PRGO -0.34%). Although the company's share price rebounded along with the overall stock market, it's now again close to the low point it hit in March.
Investors wondering if Perrigo would report good news received their answer when the healthcare company announced its third-quarter results after the market closed on Wednesday. Here are the highlights from Perrigo's Q3 update.
By the numbers
Perrigo reported revenue in the third quarter of $1.21 billion, up 1.3% year over year. This fell short of the Wall Street consensus revenue estimate of $1.24 billion.
The company announced a net loss of $155 million, or $1.13 per share, in the third quarter based on generally accepted accounting principles (GAAP). This reflected significant deterioration from the GAAP earnings of $92 million, or $0.67 per share, reported in the same quarter of 2019.
Now for a little bit of good news. Perrigo recorded adjusted earnings of $128 million, or $0.93 per share, in Q3. Although this result was lower than the adjusted earnings of $1.04 per share in the prior-year period, it beat the average analyst estimate for adjusted earnings of $0.84 per share.
Behind the numbers
The best news of all for Perrigo in Q3 came from its consumer self-care Americas (CSCA) segment. The CSCA generated record net sales of $664 million, a 7.3% year-over-year increase. This growth stemmed from continued strong U.S. consumer demand.
Perrigo's consumer self-care international (CSCI) segment posted net sales of $339 million, down 2.9% year over year. This decline resulted mainly from the impact of the COVID-19 pandemic in Europe.
However, the company's growth was held back by its September recall of respiratory drug albuterol sulfate. Perrigo stated that its consolidated sales took a 0.7% hit from this recall. The company's revenue gains were also partially offset by $15 million from divested businesses.
The albuterol sulfate recall also hurt Perrigo's bottom line with a $0.14 charge to its diluted earnings per share. Perrigo also took a $202 million goodwill impairment during the third quarter in its pharmaceutical business.
Perrigo reaffirmed its full-year 2020 guidance of net sales growth between 6% and 7%, with organic net sales growth of at least 3%. It also continues to project adjusted diluted earnings per share of between $3.95 and $4.15.
The main wild card for the healthcare stock is the COVID-19 pandemic. Perrigo stated that "future waves of COVID-19 could present both incremental risks as well as opportunities for the company's business."
What about the impact of the U.S. elections? While several pharmaceutical stocks jumped after Election Day, Perrigo wasn't one of them. It seems likely that the election results won't materially affect Perrigo's prospects.