Valeant Just Slashed Its Profit Guidance
Valeant Pharmaceuticals International Inc (VRX) cut its revenue forecast for the year, due to slower growth in its U.S. dermatology, gastrointestinal and woman’s health businesses.
Total revenue is expected to be $11.0 billion-$11.2 billion, compared with its previous estimate of $12.5 billion-$12.7 billion, Valeant said on Tuesday.
Under scrutiny for its business and accounting practices, Valeant said preliminary fourth-quarter revenue was $2.8 billion, hurt by softer-than-expected sales in its gastrointestinal business.
The company originally provided its 2016 forecast in December, but withdrew it on Feb. 29 when Chief Executive Michael Pearson returned from two months medical leave.
Pearson warned 2016 is going to be a difficult year for the embattled firm, saying:
“The challenges of the past few months are not yet behind us and our goal for 2016 is to better balance our priorities across all of our constituencies – physicians, patients, employees, payors, debt holders and shareholders.”
Despite that, he described the company’s liquidity position as “comfortable” and said Valeant was still “well positioned” to meet its obligations.
Valeant said in a regulatory filing that if it did not file its annual report by Tuesday it would be in breach of a reporting covenant and holders of at least 25 percent of any series of notes may deliver a notice of default.
The company, whose U.S-listed shares were down about 8 percent in premarket trading, reported adjusted earnings of $2.50 per share, compared with the average analyst estimate of $2.61.
The company said it expected adjusted earnings of $9.50-$10.50 per share for 2016, down sharply from its previous estimate of $13.25-$13.75 per share.
Analysts on average were expecting earnings of $13.24 per share on revenue of $12.41 billion.