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Bausch (BHC) Up 21.2% Since Last Earnings Report: Can It Continue?
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A month has gone by since the last earnings report for Bausch Health (BHC - Free Report) . Shares have added about 21.2% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Bausch due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Bausch Down on Q1 Earnings & Sales Miss, View Trimmed
Bausch’s adjusted earnings per share of 89 cents were a penny short of the Zacks Consensus Estimate of 90 cents and down from $1.02 reported in the year-ago quarter.
Total revenues of $2.01 billion missed the Zacks Consensus Estimate by 1.68% and marginally declined from $2.02 billion a year ago. Revenues were negatively impacted by the COVID-19 pandemic to the tune of approximately $35 million.
Quarter in Detail
Revenues in the Bausch + Lomb/International segment (comprised 55.3% of the total revenues) were $1.1 billion, roughly flat year over year. Excluding the impact of discontinuations and divestitures, the segment organically improved approximately 2%, driven by growth in the Global Consumer and International business.
The Salix segment revenues rose 7% year over year to $477 million, primarily driven by 23% growth in Xifaxan.
The company announced top-line results from a phase II study evaluating an investigative soluble solid dispersion (SSD) formulation of immediate release (IR) rifaximin in combination with the current standard-of-care therapy for the treatment of Overt Hepatic Encephalopathy. Results showed that the 40 mg BID of rifaximin SSD IR plus standard-of-care therapy arm met its primary endpoint with statistically significantly superior results compared with the placebo plus standard-of-care therapy arm.
The Ortho Dermatologics segment revenues were $133 million, down 4% year over year due to lower volumes resulting from the loss of exclusivity of Elidel, Zovirax and Solodyn. This was partially offset by 34% growth in the Global Solta business, driven by continued strong demand for ThermageFLX following its launch in the Asia-Pacific region.
Diversified Products segment revenues were $288 million, down 9% from the year-ago quarter, primarily due to the loss of exclusivity of certain products.
During the quarter, the company repaid debt by approximately $220 million with cash generated from operations.
2020 Guidance Lowered
The company lowered its revenue guidance range for 2020 primarily due to the actual and anticipated impacts of the COVID-19 pandemic. Revenues are now projected to be $7.80-$8.20 billion compared with the previous guidance of $8.65-$8.85 billion.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended downward during the past month. The consensus estimate has shifted -16.95% due to these changes.
VGM Scores
At this time, Bausch has an average Growth Score of C, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Bausch has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Bausch (BHC) Up 21.2% Since Last Earnings Report: Can It Continue?
A month has gone by since the last earnings report for Bausch Health (BHC - Free Report) . Shares have added about 21.2% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Bausch due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Bausch Down on Q1 Earnings & Sales Miss, View Trimmed
Bausch’s adjusted earnings per share of 89 cents were a penny short of the Zacks Consensus Estimate of 90 cents and down from $1.02 reported in the year-ago quarter.
Total revenues of $2.01 billion missed the Zacks Consensus Estimate by 1.68% and marginally declined from $2.02 billion a year ago. Revenues were negatively impacted by the COVID-19 pandemic to the tune of approximately $35 million.
Quarter in Detail
Revenues in the Bausch + Lomb/International segment (comprised 55.3% of the total revenues) were $1.1 billion, roughly flat year over year. Excluding the impact of discontinuations and divestitures, the segment organically improved approximately 2%, driven by growth in the Global Consumer and International business.
The Salix segment revenues rose 7% year over year to $477 million, primarily driven by 23% growth in Xifaxan.
The company announced top-line results from a phase II study evaluating an investigative soluble solid dispersion (SSD) formulation of immediate release (IR) rifaximin in combination with the current standard-of-care therapy for the treatment of Overt Hepatic Encephalopathy. Results showed that the 40 mg BID of rifaximin SSD IR plus standard-of-care therapy arm met its primary endpoint with statistically significantly superior results compared with the placebo plus standard-of-care therapy arm.
The Ortho Dermatologics segment revenues were $133 million, down 4% year over year due to lower volumes resulting from the loss of exclusivity of Elidel, Zovirax and Solodyn. This was partially offset by 34% growth in the Global Solta business, driven by continued strong demand for ThermageFLX following its launch in the Asia-Pacific region.
Diversified Products segment revenues were $288 million, down 9% from the year-ago quarter, primarily due to the loss of exclusivity of certain products.
During the quarter, the company repaid debt by approximately $220 million with cash generated from operations.
2020 Guidance Lowered
The company lowered its revenue guidance range for 2020 primarily due to the actual and anticipated impacts of the COVID-19 pandemic. Revenues are now projected to be $7.80-$8.20 billion compared with the previous guidance of $8.65-$8.85 billion.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended downward during the past month. The consensus estimate has shifted -16.95% due to these changes.
VGM Scores
At this time, Bausch has an average Growth Score of C, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Bausch has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.