Valeant Pharmaceuticals Intl Inc (NYSE:VRX) Earnings Miss By $0.11, Cuts 1Q Forecast


Valeant Pharmaceuticals Intl Inc (NYSE:VRX) announced adjusted earnings that missed Street analysts’ expectations by eleven cents a share in the fourth quarter. However, revenue for the same period came in above the expectations. That didn’t seem to matter as the stock is down 50% today.

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The company indicated that the results were only preliminary. Its outlook for the current year also came in below expectations.

4Q Results

Valeant reported earnings of 98 cents a share for the fourth quarter. On an adjusted basis, its earnings would have been $2.50 a share, which was eleven cents a share short of analysts’ expectations of $2.61 a share.

The company disclosed unaudited revenue of $2.8 billion, which was up by nearly $0.05 billion from expectations of $2.75 billion. The pharmaceutical firm indicated that its quarterly sales were unfavorably affected by softer-than-predicted sales of gastrointestinal business versus the outlook issued in December. The company blamed the drop in the wholesale and retail channels as a reaction to the company’s announcement of a deal with Walgreens. Valeant closed the quarter with GAAP cash flow from operations of $562 million while adjusted cash flow from operations was $838 million.

Outlook Slashed

For the first quarter, the company slashed its adjusted earnings guidance to $1.30 – $1.55 a share from its earlier outlook of $2.35 – $2.55 a share. Similarly, the company reduced its top line forecast to $2.3 – $2.4 billion from the earlier guidance of $2.8 – $3.1 billion. Street analysts were looking for earnings of $2.63 a share and revenue of $2.82 billion for the same period.

For the full year 2016 also, Valeant has reduced its adjusted earnings forecast to $9.50 – $10.50 a share from the earlier outlook of $13.25 – $13.75 a share. The company also slashed its revenue guidance to $11.0 – $11.2 billion from $12.5 – $12.7 billion and cut adjusted EBITDA forecast to $5.6 – $5.8 billion from $6.9 – $7.1 billion. Street analysts’ were looking for earnings of $13.24 a share and revenue of $12.41 billion.

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