Valeant Pharmaceuticals Intl Inc (VRX) EBITDA Guidance Fall Short On Buy Side Expectations: Evercore ISI

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Valeant Pharmaceuticals stock plunged by 14.9% on earnings call

Valeant Pharmaceuticals Intl Inc (NYSE:VRX) shares plunged by 14.9% in a day to $24.53 after the miss in earnings call. Valeant announced its latest quarterly earnings today on June 7, reporting adjusted earnings of $1.27 with revenue of $2.37 billion. There was an increase in revenue of the company on year-over-year basis by 9%, which was merely due to recent acquisitions that posted a growth under Valeant supervision. However, the increase wasn’t enough to boost the revenue up to market expectations and fall behind the estimates suggested by the Street analysts around $2.39 billion. Moreover, the earnings were also below consensus earnings per share (EPS) estimate of $1.37 by the Street.

The earnings weren’t the only reason for market reaction. Valeant guidance announcement for the full year also disappointed the investors as it has reduced its full year outlook for the second time. The EPS for the year is expected to be somewhere in between $6.60 and $7, which is significantly below of consensus estimate of $8.50 to $9.50. The revenue guidance for the year was also slashed by the company to $9.9 to $10.01 billion which is comparatively below consensus estimate of $10.86 suggested by the Street analysts.

Evercore ISI analysts commented over the matter by publishing a report covering Valeant just after the earnings release. The research analysts stated that Valeant EBITDA guidance of $4.8-4.9 billion might fall short on Street expectations of $5.1 billion but are in line with the maintenance covenants requirement of $4.8 billion.

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