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Making a Loss Look Like a Profit

Drugmaker Perrigo describes its results on its own adjusted terms.

By Neil Weinberg, Bloomberg | Updated on September 14, 2016

Activist investor Starboard Value 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 sparingly, despite a net loss of $33 million using non-adjusted accounting that adheres to Generally Accepted Accounting Principles, known as GAAP.

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