Business in Brief: Perrigo Pulls Rug From Early Gains in Tel Aviv

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Credit: Reuters

Perrigo plunges on poor earnings and an even poorer outlook

Perrigo shares plunged on Wednesday after the drugmaker reported lower-than-expected earnings for the second quarter and offered a gloomy outlook for the rest of the year. The U.S. drugmaker with extensive Israeli operations and a Tel Aviv Stock Exchange listing reported adjusted earnings of $1.93 per diluted share, below estimates of $2, according to a poll by Zacks Investment Research. Revenue fell 3.3% to $1.48 billion, slightly ahead of Zacks’ $1.44-billion forecast. But the slight upside was overwhelmed by Perrigo’s guidance, which now sees adjusted earnings of $6.85 to $7.15 a share, lower than its previous guidance of $8.20 to $8.60. Analysts had expected earnings of $8.19 per share for the year. CEO John Hendrickson attributed the downgrade primarily to “competition and price erosion in the [prescription-drug] business.” Perrigo shares, which lost over half their value in the past year, ended down 9.9% at 323 shekels ($84.72) on the TASE. (TheMarker)

Cellcom Israel profit jumps despite drop in revenues

Cellcom Israel, the country’s largest mobile phone operator, on Wednesday reported sharply higher quarterly profit, saying the erosion in cellular revenue had moderated while it will continue to invest in its TV service. Net profit was 44 million shekels ($11.6 million) in the second quarter, up 267% from a year earlier, even though revenue dipped 1.1% to 1.03 billion shekels and it took a 13-million-shekel expense related to a voluntary retirement plan. The company was forecast to earn 42 million shekels on revenue of 1.02 billion shekels, according to a Reuters poll of analysts. Cellcom’s subscriber base declined by 1.3% in the quarter over last year to 2.812 million, but it added 12,000 customers to its TV service, bringing its subscriber base to 87,000 households. “We will continue to invest in Cellcom TV so it continues to be a quality and an advanced alternative to the existing TV service providers,” said CEO Nir Sztern. Cellcom shares climbed 6.1% to end at 28.20 shekels (Reuters)

Israel Chemicals turns in better-than-expected earnings

Israel Chemicals reported better-than-expected second-quarter profit on on Wednesday and predicted further gains from its specialty product units. The company earned $132 million, or 10 cents a diluted share, excluding one-off items, down from $171 million, or 13 cents, in the same quarter a year ago, but the bottom line was higher than the 6 cents per share forecast analysts polled by Thomson Reuters I/B/E/S. Revenue jumped 15% to $1.4 billion, in part because of a strike in the year-ago quarter that cut production. Revenues beat a $1.26-billion forecast. ICL said results benefited from diversification away from core businesses into specialty products, like advanced additives and specialty fertilizers. Sales at the specialty solutions business grew 15% in the quarter. “This is a sustainable growth rate for the upcoming quarters as well,” CEO Stefan said on a conference call with analysts. ICL shares finished up 4% at 15.75 shekels ($4.13). (Reuters)

Perrigo  pulls rug from early gains in Tel Aviv

Tel Aviv shares were trading higher until mid-afternoon Wednesday, when disappointing earnings by Perrigo ended the streak. The benchmark TA-25 index ended down 0.8% at 1,462.70 points, while the TA-100 lost 0.7% to 1,281.37, on turnover of 1.36 billion shekels ($360 million). Earnings were the theme of the day, not just bringing down Perrigo but lifting Israel Chemicals, the day’s volume leader, and Cellcom Israel. Partner Communications gained 3.3% to 18.73 shekels, presumably a knock-on effect of Cellcom’s results. Other drug stocks fell with Perrigo. Teva slid 1.1% to 201.80 and Mylan skidded 3.3% to 1873. Real-estate shares were higher, led by Melisron’s 1.9% gain to a 40-shekel closing. But tech stocks were mostly lower, with TowerJazz down 1.5% at 57.35. In foreign currency trading the dollar extended losses to a Bank of Israel rate of 3.8110 while the euro strengthened 0.65% to 4,2632. (Uri Tomer and Omri Zerachovitz)