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Bausch's (BHC) Q4 Earnings and Revenues Surpass Estimates

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Bausch Health Companies Inc. (BHC - Free Report) reported better-than-expected fourth-quarter 2020 results.

The stock has gained 48.9% in the year so far compared with the industry’s growth of 8.7%.


The company’s adjusted earnings per share of $1.33 easily beat the Zacks Consensus Estimate of $1.11 and increased from $1.15 reported in the year-ago quarter.

Total revenues of $2.2 billion beat the Zacks Consensus Estimate of $2.1 billion but were relatively flat year over year.

Quarter in Detail

Revenues in the Bausch + Lomb/International segment (comprised 56% of the total revenues) were $1.24 billion, flat year over year. Excluding the impact of discontinuations and divestitures, segment sales were flat organically due to the impacts of the COVID-19 pandemic.

The company launched several products in 2020 in this segment. Earlier, the company acquired an exclusive license from Eyenovia, Inc. (EYEN - Free Report) in the United States and Canada for the development and commercialization of an investigational microdose formulation of atropine ophthalmic solution, which is being investigated for the reduction of pediatric myopia progression in children aged 3-12 years.  The company also announced an agreement to acquire an option to purchase all ophthalmology assets of Allegro Ophthalmics, LLC, including global rights for risuteganib (Luminate).

The Salix segment revenues were up 2% year over year to $527 million. Sales of Xifaxan increased 4% and sales of Trulance grew 33%. The FDA granted Orphan Drug designation to rifaximin for the treatment of sickle cell disease.

The Ortho Dermatologics segment revenues were $160 million, up 1% year over year.

Diversified Products segment revenues were $284 million, down 9% from the year-ago quarter, primarily due to the loss of exclusivity of certain products and the pandemic-led woes.

During the quarter, the company repaid the debt by approximately $480 million.

Full-Year 2020 Results

Revenues in 2020 came in at $8.0 billion, down 7% from 2019. Revenues were negatively impacted by the COVID-19 pandemic to the tune of approximately $740 million.

During the quarter, the company repaid the debt of approximately $900 million.

2021 Guidance

Revenues are projected to be $8.60-$8.80 billion.

Agreement With Carl C. Icahn

Bausch will expand its board of directors to add two designees from Carl C. Icahn and affiliated entities.

Our Take

Bausch beat on earnings and sales in the fourth quarter as recovery from the COVID-19 pandemic is in progress. The company plans to spin off its eye health business into an independent public company and internal objectives for this transaction are anticipated to be achieved by the end of the third quarter of 2021.

Zacks Rank & Stocks to Consider

Bausch currently carries a Zacks Rank #3 (Hold). A couple of better-ranked stocks in the healthcare space are Repligen (RGEN - Free Report) and Dynavax Technologies Corporation (DVAX - Free Report) , both carrying a Zacks Rank #2 (Buy), presently. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Repligen’s earnings per share estimates have moved up from $1.63 to $1.66 for 2021 in the past 90 days.

Dynavax loss per share estimates have narrowed to 17 cents from 45 cents in the past 30 days.

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