Valeant Pharmaceuticals Intl Inc (NYSE: VRX) is having an overwhelmingly strong start to the trading session in the pre-market hours this morning after reporting its financial results for the first quarter, increasing guidance and announcing a name change. Ultimately, the news led to excitement among investors, sending the stock on a run for the top. Today, we’ll talk about:
- What we saw from earnings;
- how the market is reacting to the news; and
- what we’ll be watching for with regard to VRX ahead.
VRX Reports Financial Results & Announces Name Change
As mentioned above, Valeant Pharmaceuticals is having an overwhelmingly strong start to the trading session this morning after the company reported its earnings for the first quarter and announced that it would be changing its name. Here’s what we saw from the report:
- Losses – In terms of losses, this was the one point that VRX simply didn’t meet the mark. During the quarter, analysts expected that the company would generate earnings in the amount of $0.60 per share. However, the company actually reported a loss of $2.69 billion in the quarter. That works out to a loss of about $7.68 per share, missing analyst expectations by a large margin.
- Revenue – When it comes to revenue, the company reported a figure that was above estimates. During the quarter, the company generated revenue in the amount of $1.995 billion. Analysts expected that the company would only generate revenue in the amount of $1.949 billion.
- Guidance – Finally, guidance proved to be a source of excitement for investors. During the year 2018, the company is expecting that revenue will come in between $8.15 billion and $8.35 billion. That figure is up from the $8.10 billion to $8.30 billion range.
- Name Change – Finally, the company said that it would be changing its name to Bausch Health Companies Inc. It is expected that this change will take place starting in July.
In a statement, Joseph C. Papa, Chairman and CEO at VRX, had the following to offer:
Our first-quarter 2018 results demonstrate that we are making significant progress in our turnaround. For the first time since 2015, the Company delivered overall organic revenue growth2 that tracked above expectations and was driven by our Branded Rx and Bausch + Lomb/International segments… As a result, we are raising our full-year revenue and Adjusted EBITDA (non-GAAP) guidance ranges to reflect our strong performance in the first quarter.
What We’re Seeing From The Stock
As investors, one of the first lessons that we learn is that the news moves the market. In this particular case, the news proved to be overwhelmingly positive. While earnings missed the mark, Valeant’s revenue guidance came in well ahead of expectations, and investors are forward looking. So, the guidance proved to be a source of excitement. This can be seen in the price of the stock this morning. Of course, our partners at Trade Ideas were the first to alert us to the gains. At the moment (8:23), VRX is trading at $19.36 per share after a gain of $1.20 per share (6.61%) thus far today.
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What We’ll Be Watching For Ahead
Moving forward, the CNA Finance team will continue to keep a close eye on VRX. In particular, we’re interested in following the story surrounding the company’s shift to Bausch Health Companies and the continued restructuring of the company. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!
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