And reports its first profit in six quarters
Canada’s Valeant Pharmaceuticals International vrx reported its first profit in six quarters, helped by a one-time tax gain, and raised its full-year earnings forecast, sending its U.S. shares up 13 percent in premarket trading.
Laval, Quebec-based Valeant has been trying to rebuild its business and regain investor confidence after the company came under investigations over its accounting and pricing practices.
The company said it now expects 2017 adjusted earnings before interest, tax, depreciation and amortization (EBITDA) of $3.60-$3.75 billion, up from its previous forecast of $3.55-$3.70 billion.
Valeant has been focusing on its dermatology, eyecare and gastrointestinal units while selling off some other assets as it looks to pay down its heavy debt, racked up after years of acquisitions.
The troubled drugmaker said it had lowered its debt by $1.3 billion in the latest quarter, and that its long-term debt was $28.54 billion as of March 31.
Valeant is on pace to meet its target of repaying $5 billion in debt between August 2016 and February 2018, Chief Executive Joe Papa told shareholders last week.
Net income attributable to Valeant was $628 million, or $1.79 per share, in the first quarter ended March 31, compared with a loss of $374 million, or $1.08 per share, a year ago.
The latest results included a one-time income tax benefit of $908 million related to an internal restructuring.
The company said its adjusted net income was $273 million.
On a per share basis, Valeant’s earnings were 78 cents per share, below the average estimate of 82 cents, according to Thomson Reuters I/B//E/S.
Revenue fell to $2.11 billion from $2.37 billion, missing the average estimate of $2.18 billion.
Revenue at its branded Rx unit, which houses the dermatology and Salix businesses, fell 9 percent to $604 million in the quarter, primarily driven by decreased volumes.
Valeant said the decrease in volume was partially offset by an increase in average realized prices, partly due to lower customer subsidies and accommodations and higher wholesaler selling prices.
“The focus point has not been volume but to stabilize average selling price and we do believe we have done that, at this point,” Scott Hirsch, Senior Vice President of Business Strategy and Communication told Reuters.