It has been about a month since the last earnings report for Bausch Health (BHC Quick QuoteBHC - Free Report) . Shares have added about 13.8% 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 its most recent earnings report in order to get a better handle on the important drivers.

Bausch's Q1 Earnings Beat Estimates, Revenues Miss

The company’s adjusted earnings per share of $1.04 easily beat the Zacks Consensus Estimate of 94 cents and increased from 89 cents reported in the year-ago quarter.

Total revenues of $2 billion missed the Zacks Consensus Estimate by 2.10% but increased 1% year over year. Revenue was negatively impacted by approximately $100 million in the first quarter of 2021 due to the COVID-19 pandemic.

Quarter in Detail

Effective the first quarter of 2021, the company operates in the following reportable segments — Bausch + Lomb, Salix, International Rx, Ortho Dermatologics and Diversified Products.

Revenues in the Bausch + Lomb segment were $881 million, up 1% year over year. Excluding the favorable impact of $26 million from foreign exchange and the impact of divestitures and discontinuations of $2 million, the Bausch + Lomb segment decreased organically by approximately 2% year over year, primarily due to the impact of the COVID-19 pandemic.

Bausch Pharma (comprising Salix, International, Ortho Dermatologics and Diversified Products) revenues were $1.146 billion, up 1% year over year. Among these, Salix segment revenues came in at $472 million, down 1%. The decline was primarily driven by the impact of the COVID-19 pandemic. Xifaxan sales declined 2% year over year.

International Rx segment revenues in the quarter were $306 million, up 5%. Ortho Dermatologics segment revenues were $141 million for the quarter under review, up 8% year over year.  The Ortho Dermatologics segment grew organically by approximately 5%, primarily owing to sales of the Thermage franchise.

Diversified Products segment revenues were $227 million, down 5% from the year-ago quarter, primarily due to the loss of exclusivity of certain products.

During the quarter, the company repaid debt by approximately $200 million.

2021 Guidance Reiterated

Revenues are projected to be $8.60-$8.80 billion for this year.

Planned Separation of Eye Health Business

The company announced that Joseph C. Papa and Sam Eldessouky will serve as the CEO and CFO, respectively, of Bausch + Lomb upon separation of the Bausch + Lomb eye health business. In addition, the company continued to make progress toward internal objectives necessary for the separation, including operating in five reportable segments beginning the first quarter of 2021.


 

How Have Estimates Been Moving Since Then?

It turns out, estimates revision have trended downward during the past month. The consensus estimate has shifted -6.46% due to these changes.

VGM Scores

Currently, Bausch has a nice Growth Score of B, 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 quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of A. 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.