What happened

Shares of drug company Perrigo (PRGO -0.79%) are down 11.8% as of midday Wednesday following the release of disappointing third-quarter earnings and equally disappointing guidance.

So what

For the three-month span ending in early October, Dublin-based Perrigo turned $1.04 billion worth of revenue into operating income of $438 million. The top line came close to meeting expectations. Adjusted operating profits of $0.45 per share, however, were down from the year-ago comparison of $0.60. More notably, earnings fell short of analysts' estimates for earnings of $0.65 per share, largely due to the company's rising materials and shipping costs.

Falling stock chart on a computer screen.

Image source: Getty Images.

Don't look for relief anytime soon, either. Perrigo's updated full-year earnings outlook has been dialed back to a range of $2 to $2.10 per share, down from guidance of $2.50 to $2.70 per share issued just three months ago. The math suggests the quarter currently underway will be another expensive one.

Now what

Today's steep sell-off is tempting to investors already eyeing Perrigo as a potential purchase, particularly after years of subpar performance. Indeed, Wednesday's pullback drags the stock back within sight of the new multiyear lows it was flirting with as recently as August.

Don't take that proverbial bait, though. The stock's continued weakness since 2015's high is evidence of business woes that go well beyond the abnormal inflation all consumers and corporations are facing right now. While its over-the-counter drugs like ibuprofen, antibiotic ointment, and allergy relief are always marketable, those are competitive, low-growth markets. Investors can find much better opportunities.