Bausch Health reports better Q2 results, raises 2019 earnings forecast

LAVAL, Que. — Bausch Health Companies Inc. slightly missed earnings estimates in the second quarter even as it nudged up its full-year forecast Tuesday on better results.

Chief executive Joseph Papa said he expects Bausch — formerly known as Valeant Pharmaceuticals — will generate between US$8.4 billion and US$8.6 billion in revenue this year, about US$50 million more than its previous outlook.

Bausch, which reports in U.S. dollars, also raised its adjusted EBITDA (earnings before interest, taxes and other items) range by $25 million to between $3.43 billion and $3.58 billion.

“Our strong second-quarter results demonstrate that our team’s efforts to pivot to offence continue to gain traction,” Papa said on a conference call, citing three per cent organic revenue growth in the second quarter compared with the same period last year.

He reiterated his forecast that Bausch, which has shifted away from an aggressive acquisition strategy to focus on slashing debt since Papa took the helm in 2016, will double annual revenue from its seven major products to roughly $300 million.

The so-called “significant seven,” which include optical products that treat conditions ranging from glaucoma to bloodshot eyes, rose 76 per cent in the first half of 2019 to drive overall sales growth.

Bausch chopped its debt by about $100 million in the quarter ended June 30, shrinking total debt by 0.4 per cent year-over-year to $24.37 billion.

Headquartered in Laval, Que., Bausch has spent the past few years mired in investigations and lawsuits, including antitrust litigation and a fraud probe in California.

Those efforts have resulted in the settlement or dismissal of about 60 cases as of the end of last year, with most of the legal issues now resolved, according to a spokeswoman.

The company said its second-quarter net loss attributable to shareholders was $170 million, reduced from $872 million a year earlier.

Bausch attributed the improvement to better operating results, lower interest expenses and a smaller loss on debt repayments.

The net loss amounted to 49 cents per share, down from $2.49 per share in last year’s second quarter.

Adjusted EBITDA improved to $880 million from $868 million a year earlier while adjusted net earnings were $372 million, up from $327 million a year ago.

Bausch’s second-quarter revenue was $2.15 billion, up one per cent from a year earlier due to its New Jersey-based Salix subsidiary, which develops prescription drugs and medical devices aimed at gastrointestinal disorders.

Analysts had estimated $2.14 billion of revenue but $889.7 million in EBITDA and $377 million in adjusted net income, according to financial markets data firm Refinitiv.

Bausch’s shares lost $1.56 or nearly five per cent to close at $30 Tuesday on the Toronto Stock Exchange.

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