Valeant Pharmaceuticals Intl Inc (NYSE: VRX)
Valeant Pharmaceuticals is having an explosive trading session in the market today, and for good reason. The company recently reported Q2 earnings. While earnings did miss the mark in the second quarter, investors are incredibly excited about the outlook offered. Today, we’ll talk about what we saw from earnings, how the market reacted to the news, and what we can expect to see from VRX moving forward. So, let’s get right to it…
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VRX Gains On Earnings
As mentioned above, Valeant Pharmaceuticals is having a strong day in the market today after releasing its second quarter earnings report. While performance wasn’t great in the quarter, guidance proved to be exciting. Here’s what we saw:
- Earnings – In terms of earnings per share, VRX did miss the mark. During the second quarter, analysts expected that the company would generate earnings in the amount of $1.48 per share. However, the company actually reported that earnings for the quarter came in at $1.40 per share.
- Revenue – Unfortunately, revenue wasn’t much better, as VRX missed the mark here as well. During the second quarter, analysts expected that the company would produce revenue in the amount of $2.46 billion. However, the company actually reported revenue in the amount of $2.42 billion, once again, missing the mark.
- Guidance – So, Valeant Pharmaceuticals had a weak second quarter. Nonetheless, investors are excited and the guidance is the reason. Given the rough time the company has faced since the Philidor scandal, investors were expecting that VRX would produce relatively low guidance. However, during the earnings release, the company reaffirmed FY2016 guidance, saying that it expects EBITDA will be in the range of $4.80 and $4.95 billion.
Following the release of earnings, Joseph C. Papa, Chairman and CEO at VRX, had the following to offer:
“We continue to make progress towards stabilizing the organization… We are also announcing a new strategic direction for Valeant today, which, at its heart has a mission to improve patients’ lives, and will involve reorganizing our company and reporting segments. I am continuously encouraged by the commitment of our employees who work hard daily, rebuilding our relationships with prescribers, patients and payors, and regaining the trust of our debt holders and shareholders. Although it will take time to implement and execute our turnaround plan, I am confident that we will show progress in the coming quarters.”
How The Stock Reacted To The News
As investors, one of the first things that we learn is that the news moves the market. In this particular case, while Valeant Pharmaceuticals did have a weaker-than-expected second quarter, the news of strong guidance and a key turnaround plan are exciting investors. As a result, the stock is seeing tremendous gains during today’s trading session. Currently (12:09), VRX is trading at $26.70 per share after a gain of $4.25 per share (18.93%) thus far today.
What We Can Expect To See Moving Forward
Moving forward, I maintain my overwhelmingly bullish opinion of what we can expect to see from VRX. While there’s no doubt that the company has struggled as a result of the Philidor scandal, under new management they have created a plan for growth and seem to be following through on that plan. All in all, Valeant Pharmaceuticals is a great company with great products. While it has hit a bump in the road, I believe that recent low levels present an opportunity for the savvy investor. All in all, I’m expecting to see long-run gains.
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What Do You Think?
Where do you think VRX is headed moving forward and why? Join the discussion at TalkTRENDZ!
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