Perrigo Company plc PRGO reported second-quarter 2020 adjusted earnings of  $1.03 per share, which beat the Zacks Consensus Estimate of 87 cents. The bottom line increased 19.8% year over year.

Net sales increased 6.1% year over year to $1.22 billion, missing the Zacks Consensus Estimate of $1.23 billion by a slight margin. The year-over-year growth was driven by addition of products from the recently closed Ranir acquisition, launch of generic albuterol sulfate and higher sales of over-the-counter (“OTC”) products. These were partially offset by a loss of $11 million in sales from discontinued products, $26 million from divested businesses and adverse impact of COVID-19 on international ales. Sales rose 10% excluding exited businesses and the impact of foreign currency movement. Organic net sales (excludes sales of Ranir products, exited businesses and the impact of currency) were up 2.6% year over year.

Moreover, the company’s business received a boost with lower-than-expected consumer pantry de-load in U.S. OTC market. Please note that demand for self-care products and drugs had increased in March due to stockpiling by customers amid COVID-19 pandemic.

Shares of Perrigo have increased 6.7% so far this year against the industry’s decline of 4.7%.

Segment Discussion

Perrigo now reports its results under the following segments — Consumer Self Care Americas (“CSCA”), Consumer Self Care International (“CSCI”) and Prescription Pharmaceuticals (“RX”). In the first quarter of 2019, the company initiated a process to transform itself from a healthcare to a consumer self-care company.

Last year, the company acquired Ranir Global Holdings LLC, the global leader in private label oral self-care market, as part of its transformation into a self-care company, which significantly boosted revenues of CSCA and CSCI segments.

CSCA: Net sales of the segment in the second quarter of 2020 came in at $628 million, up 7.8% year over year, driven by higher sales of OTC and nutrition businesses, increased demand related to COVID-19 and $63 million of net sales from oral self-care portfolio. These were partially offset by de-prioritization of certain products amid COVID-19 and normal pricing pressure on specific products. Net sales at CSCA increased approximately 1.6%, organically.

The company divested its Animal Health business for $185 million in cash to pet medication and wellness company, PetIQ PETQ, in 2019. The company lost sales of $22 million during the quarter from the exited animal health business.

CSCI: The segment reported net sales of $231 million, down 2% from the year-ago period. The decline was due to lower category sales owing to COVID-19 related bans and consumer pantry de-stocking. These were partially offset by new product sales of $23 million, especially weight loss product XLS Forte 5, and $19 million of net sales from Ranir’s products. Organic sales decreased 3%.

Rx Segment: Net sales of the segment increased 12.9% to $270 million. The upside can be attributed to new product sales of $58 million, led by the launch of generic version of Teva’s TEVA inhaler — ProAir HFA — partially offset by lower dermatology volumes. The company lost $9 million in sales from discontinued products.

2020 Guidance

Perrigo maintained its outlook for 2020 that it had provided on its fourth-quarter 2019 earnings call.

Perrigo expects adjusted earnings in the range of $3.95 to $4.15 per share. It anticipated net sales to grow 6-7% year over year in 2020. Organic growth in net sales was expected to be approximately 3%.

Zacks Rank and Other Stocks to Consider

Currently, Perrigo is a Zacks Rank #2 (Buy) stock.

Another stock to consider from the biotech sector is Emergent Biosolutions Inc. EBS, sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Emergent Biosolutions’ earnings per share estimates have moved up from $3.45 to $3.58 for 2020 in the past 30 days. The company delivered an earnings surprise of 127.41%, on average, in the last four quarters. The stock has risen 145.7% so far this year.

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