Valeant Pharmaceuticals Intl Inc (NYSE:VRX) issued its quarterly earnings results on Tuesday. Track the stock here.
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Valeant’s revenue for the fourth quarter was just under $2.8 billion – in line with analyst estimates – but Valeant reduced its previous sales and adjusted earnings estimates for the first quarter of 2016. Revenue has now been forecast to come in within a range of $2.3 billion and $2.4 billion dropping from prior guidance of $2.8 billion to $3.1 billion. The average estimate of eight analysts surveyed by Zacks Investment Research was for earnings of $2.64 per share. (VRX), a pharmaceuticals company yesterday reported their fourth quarter 2015 financial results and provided guidance for 2016. On an adjusted basis, its earnings would have been $2.50 a share, which was eleven cents a share short of analysts’ expectations of $2.61 a share.
“We have to earn back the credibility”, Pearson said in his first public remarks since returning from a medical leave two weeks ago.
Valeant pulled its financial guidance and delayed reporting fourth-quarter results. The same period from the previous year had $2.58 in EPS on $2.28 billion in revenue.
Valeant’s long-term debt stood at around $30bn as of last September, a level that reflects its policy of growth by acquisition in recent years.
The Laval, Que.,-based company has confirmed it is being investigated by the U.S. Securities and Exchange Commission.
“The challenges of the past few months are not yet behind us and our goal for 2016 is to better balance our priorities across all of our constituencies-physicians, patients, employees, payors, debt holders and shareholders”, Valeant CEO Michael Pearson said Tuesday.
The drug company’s stock closed down 51% to $33.54 a share Tuesday on disappointing financial news, including a warning that a late filing could lead to bond defaults that may hurt the company’s ability to borrow money.
The upcoming Quarter’s sales estimate is determined at $2.82B by 11 analysts as well as sales projection for the upcoming year is set $12.41B by 22 analysts.
“Uncertainty about the potential for a default creates enormous investor fear”, said Bill Ackman, the well-known hedge fund manager who is also a major Valeant shareholder.
The way Ackman sees it, “the value of the underlying business franchises that comprise Valeant are worth multiples of the current market price”. Adding to the company’s problems, during the call it corrected its press release issued hours before, saying that one measure of earnings would actually be lower than it had stated.
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The company noted that its results for the first quarter have been impacted by continued inventory destocking in dermatology and GI, revenue shortfalls in several business such as Ophthalmology Rx, Commonwealth, Western Europe, Women’s Health, Solta and Obagi, and little to no corresponding cost reductions to compensate.
