Making a Loss Look Like a Profit: Where Perrigo Led the S&P 500
- Drugmaker’s adjusted and GAAP earnings had 2015’s widest gulf
- Perrigo’s performance is under scrutiny by activist Starboard
Tablets of over-the-counter allergy medicines, manufactured by Perrigo.
Photographer: Andrew Harrer/BloombergThis article is for subscribers only.
Activist investor Starboard Value LP rattled Perrigo Co. on Monday with a scathing criticism of the drug company’s management. A look at Perrigo’s financials reveals one way management has excelled: Making its results look good.
Quarter after quarter, the Dublin, Ireland-based maker of generic drugs relied on one-time expenses and novel terms like “organic net sales” to highlight a string of profits on its own adjusted terms. In its full-year 2015 report, Perrigo listed $1.09 billion in adjusted profit. The word “loss” was used sparely, despite a net loss of $33 million using non-adjusted accounting that adheres to Generally Accepted Accounting Principles, known as GAAP.