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Valeant Pharma (VRX) Q3 Earnings Miss, Slashes Guidance

ANIK INFI VRX BVX

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Shares of pharmaceutical company, Valeant Pharmaceuticals Inc. (VRX - Free Report) fell over 21% after the company reported disappointing third-quarter 2016 results and slashed its sales and earnings outlook for the year.

The company’s adjusted earnings per share of $1.55 missed the Zacks Consensus Estimate of $1.78 by 12.9%. Earnings declined 35.7% year over year on lower product sales.

 

Total revenue came in at $2.48 billion, missing the Zacks Consensus Estimate of $2.493 billion, and falling 11% year over year. This was mostly due to a decline in overall product sales in its existing business and negative impact from currency as well as divestitures and discontinuations. However, acquisitions completed in 2015 provided some top-line support.

Revenues in the Bausch + Lomb / International segment was $1.16 billion, a rise of 4% year over year due to increased product sales revenues from acquisitions completed in 2015 which offset a decline in product sales revenues from existing businesses

Revenues in the Branded Rx segment were $847 million, almost 23% decline from $1.1 billion in the year-ago quarter mainly due to lower average realized prices resulting from higher managed care rebates in dermatology.

Revenues in the U.S. Diversified Products segment were $471 million a decline of 16.5% year over year due to fall in product sales revenue from existing business.

Research and development expenses were $101 million in the reported quarter, in line with the year-ago quarter.

Selling, General and Administrative costs were $641.5 million compared with $673.7 million in the year-ago quarter, declining almost 5% year over year.

2016 Guidance

The company slashed its full-year 2016 guidance.

It now expects total revenue to be in the range of $9.55 billion–$9.65 billion, compared with the previous projection of $9.9 billion–$10.1 billion.

Adjusted earnings per share are now expected to be $5.30–$5.50. The previously expected range was $6.60–$7.00.

Adjusted EBITDA  is now expected in the $4.25 billion–$4.35 billion range. The previously expected range was $4.80 billion–$4.95 billion.

VALEANT PHARMA Price, Consensus and EPS Surprise

 

VALEANT PHARMA Price, Consensus and EPS Surprise | VALEANT PHARMA Quote

Valeant currently holds a Zacks Rank #5 (Strong Sell). Some better-ranked stocks in the healthcare sector include Infinity Pharmaceuticals, Inc. (INFI - Free Report) , Bovie Medical Corporation (BVX - Free Report) and Anika Therapeutics Inc. (ANIK - Free Report) . Each of the stocks sports a Zacks Rank #1(Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Infinity’s loss estimates narrowed from $3.84 to $3.79 for 2016 over the last 60 days. The company posted positive surprises in all of the four trailing quarters with an average beat of 67.62%.

Bovie’s loss estimates remained unchanged for 2016 but narrowed from 8 cents to 3 cents for 2017 over the last 60 days. The company posted positive surprises in three of four trailing quarters with an average beat of 28.69%.

Anika’s earnings estimates increased from $1.96 to $2.06 for 2016 and from $2.03 to $2.09 for 2017 over the last 60 days. The company posted positive surprises in all of the four trailing quarters with an average beat of 33.14%.

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