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Bausch Health's (BHC) Q1 Earnings & Sales Miss, Shares Down
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Shares of Bausch Health Companies Inc. (BHC - Free Report) were down 20.41% in response to first-quarter 2023 results.
The company’s adjusted earnings per share of 52 cents missed the Zacks Consensus Estimate of 75 cents and our estimate of 67 cents and also decreased from 73 cents reported in the year-ago quarter.
Total revenues of $1.94 billion were up 1% year over year. However, revenues missed our estimate of $1.95 billion and the Zacks Consensus Estimate by 0.32%
Revenues in the quarter were affected by the unfavorable impact of foreign exchange of $40 million and the impact of divestitures and discontinuations of $7 million. Revenues were up 4% on an organic basis year over year.
The stock has lost 6.2% in the year so far against the industry’s rise of 10.9%.
Image Source: Zacks Investment Research
Quarter in Detail
The company reports revenues through five segments – Salix, International, Diversified Products, Solta Medical and Bausch + Lomb.
Salix revenues came in at $496 million, up 7%, driven by growth in Xifaxan, Relistor (up 22%) and Trulance (up 10%). Xifaxan revenues grew 7% in the quarter and overall demand increased 4%.
International Rx revenues in the quarter were $247 million, up 1%. Revenues increased 5% organically , driven by growth in Canada and Europe, after excluding the unfavorable impact of foreign exchange.
Diversified Products revenues were $197 million, down 21% from the year-ago quarter due to decreases in sales across neurology, generics and dermatology, partially offset by an increase in sales in dentistry. Jublia sales were impacted partly by a shift in the patient coverage mix, which reduced net pricing.
The FDA has accepted the company’s new drug application for IDP-126, the first triple combination product for treating acne vulgaris and set a target action date of Oct 20, 2023.
Solta Medical reported revenues of $73 million, up 1%. Revenues were up 6% organically, primarily driven by strong results in Asia Pacific (excluding China). Management is cautiously optimistic for the remainder of the year and the return to growth in China following the lift of the COVID restrictions.
Revenues from Bausch + Lomb were $931 million, up 5% year over year. Excluding the unfavorable impact of foreign exchange of $31 million and the impact of divestitures and discontinuations of $2 million, revenues increased organically by 8% year over year.
Bausch Health's eye health business, Bausch + Lomb, launched its initial public offering (IPO) and subsequently began trading under the ticker "BLCO" on May 6, 2022.
Pipeline Development
The phase II study on amiselimod, a new oral S1P receptor modulator that targets the treatment of mild to moderate ulcerative colitis, is progressing. The study is expected to be completed in the second half of the year.
Bausch Health Cos Inc. Price, Consensus and EPS Surprise
Revenues are projected in the range of $8.35-$8.55 billion. Management continues to expect challenging market conditions in the neurology, dermatology and generic businesses for the balance of the year.
Our Take
Bausch's first-quarter results were disappointing due to decreases in sales across neurology, generics and dermatology. Nevertheless, the Salix business maintains momentum.
Zacks Rank and Stocks to Consider
Bausch currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the healthcare sector include Spero Therapeutics (SPRO - Free Report) , Fate Therapeutics (FATE - Free Report) and Ligand Pharmaceuticals (LGND - Free Report) . While Spero and Ligand sport a Zacks Rank #1 (Strong Buy), FATE carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Over the past 60 days, loss estimates for SPRO have narrowed to $1.02 from $1.45 for 2023. SPRO topped earnings estimates in three of the last four quarters and missed in the remaining one, the average surprise being 56.37%.
Over the past 60 days, earnings estimates for LGND for 2023 have increased by 55 cents to $4.16. LGND topped earnings estimates in just one of the last four quarters and missed in the remaining three.
Over the past 60 days, loss estimates for FATE have narrowed to $2 from $2.14 for 2023. FATE surpassed estimates in all the trailing four quarters, the average surprise being 28.42%.
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Bausch Health's (BHC) Q1 Earnings & Sales Miss, Shares Down
Shares of Bausch Health Companies Inc. (BHC - Free Report) were down 20.41% in response to first-quarter 2023 results.
The company’s adjusted earnings per share of 52 cents missed the Zacks Consensus Estimate of 75 cents and our estimate of 67 cents and also decreased from 73 cents reported in the year-ago quarter.
Total revenues of $1.94 billion were up 1% year over year. However, revenues missed our estimate of $1.95 billion and the Zacks Consensus Estimate by 0.32%
Revenues in the quarter were affected by the unfavorable impact of foreign exchange of $40 million and the impact of divestitures and discontinuations of $7 million. Revenues were up 4% on an organic basis year over year.
The stock has lost 6.2% in the year so far against the industry’s rise of 10.9%.
Image Source: Zacks Investment Research
Quarter in Detail
The company reports revenues through five segments – Salix, International, Diversified Products, Solta Medical and Bausch + Lomb.
Salix revenues came in at $496 million, up 7%, driven by growth in Xifaxan, Relistor (up 22%) and Trulance (up 10%). Xifaxan revenues grew 7% in the quarter and overall demand increased 4%.
International Rx revenues in the quarter were $247 million, up 1%. Revenues increased 5% organically , driven by growth in Canada and Europe, after excluding the unfavorable impact of foreign exchange.
Diversified Products revenues were $197 million, down 21% from the year-ago quarter due to decreases in sales across neurology, generics and dermatology, partially offset by an increase in sales in dentistry. Jublia sales were impacted partly by a shift in the patient coverage mix, which reduced net pricing.
The FDA has accepted the company’s new drug application for IDP-126, the first triple combination product for treating acne vulgaris and set a target action date of Oct 20, 2023.
Solta Medical reported revenues of $73 million, up 1%. Revenues were up 6% organically, primarily driven by strong results in Asia Pacific (excluding China). Management is cautiously optimistic for the remainder of the year and the return to growth in China following the lift of the COVID restrictions.
Revenues from Bausch + Lomb were $931 million, up 5% year over year. Excluding the unfavorable impact of foreign exchange of $31 million and the impact of divestitures and discontinuations of $2 million, revenues increased organically by 8% year over year.
Bausch Health's eye health business, Bausch + Lomb, launched its initial public offering (IPO) and subsequently began trading under the ticker "BLCO" on May 6, 2022.
Pipeline Development
The phase II study on amiselimod, a new oral S1P receptor modulator that targets the treatment of mild to moderate ulcerative colitis, is progressing. The study is expected to be completed in the second half of the year.
Bausch Health Cos Inc. Price, Consensus and EPS Surprise
Bausch Health Cos Inc. price-consensus-eps-surprise-chart | Bausch Health Cos Inc. Quote
2023 Guidance
Revenues are projected in the range of $8.35-$8.55 billion. Management continues to expect challenging market conditions in the neurology, dermatology and generic businesses for the balance of the year.
Our Take
Bausch's first-quarter results were disappointing due to decreases in sales across neurology, generics and dermatology. Nevertheless, the Salix business maintains momentum.
Zacks Rank and Stocks to Consider
Bausch currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the healthcare sector include Spero Therapeutics (SPRO - Free Report) , Fate Therapeutics (FATE - Free Report) and Ligand Pharmaceuticals (LGND - Free Report) . While Spero and Ligand sport a Zacks Rank #1 (Strong Buy), FATE carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Over the past 60 days, loss estimates for SPRO have narrowed to $1.02 from $1.45 for 2023. SPRO topped earnings estimates in three of the last four quarters and missed in the remaining one, the average surprise being 56.37%.
Over the past 60 days, earnings estimates for LGND for 2023 have increased by 55 cents to $4.16. LGND topped earnings estimates in just one of the last four quarters and missed in the remaining three.
Over the past 60 days, loss estimates for FATE have narrowed to $2 from $2.14 for 2023. FATE surpassed estimates in all the trailing four quarters, the average surprise being 28.42%.