Skip to main content

Bausch Health Cos. Inc., formerly known as Valeant Pharmaceuticals, topped Wall Street estimates for quarterly profit on Tuesday and underlined its commitment to reduce its huge debt pile.

The company’s Toronto-listed shares were up 6 per cent, while U.S. shares rose 7.5 per cent in early trading after Bausch also raised full-year adjusted EBITDA forecast.

“We will continue to prioritize the use of available cash to pay debt. We’re clearly an outlier with the amount of leverage we carry,” chief financial officer Paul Herendeen said in a postearnings call with analysts.

Story continues below advertisement

“If we can accelerate the process of getting our leverage down, it enables us to loosen up a little bit on … investments that we would like to make.”

Since taking the helm at the erstwhile Valeant in 2016, Joseph Papa has prioritized paying down the company’s debt, which had ballooned after former chief executive Mike Pearson’s aggressive acquisition strategy.

The company had reduced debt by about US$7-billion since the first quarter of 2016, with debt at US$25.43-billion as of June 30.

“[Bausch has] four times more debt than they have equity. The management team is doing all they can … but quite frankly they need more products,” BTIG analyst Timothy Chiang said.

Bausch raised its 2018 forecast for adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) to between US$3.20-billion and US$3.35-billion, from an earlier estimate of US$3.15-billion to US$3.3-billion.

Second-quarter revenue got a lift from higher sales in its Salix business. Revenue in the unit, which makes bowel disorder treatments Xifaxan and Relistor, rose nearly 14 per cent to US$441-million.

The company’s Bausch + Lomb/International segment reported organic revenue growth of about 4 per cent, adjusted for divestitures and foreign-exchange effects.

Story continues below advertisement

Net loss attributable to the company widened to US$873-million, or US$2.49 a share, for the three months ended June 30, as the company incurred an asset impairment charge and recorded an increase in income tax provision.

Excluding one-time items, the company earned 93 cents a share, well ahead of the average analyst estimate of 80 cents, according to Thomson Reuters I/B/E/S.

Total revenue fell 4.7 per cent to US$2.13-billion, largely owing to a drop in sales in its optical products and dermatology businesses. Analysts had expected US$2.06-billion.

Report an error
Tickers mentioned in this story
Unchecking box will stop auto data updates
Comments

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • All comments will be reviewed by one or more moderators before being posted to the site. This should only take a few moments.
  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

Comments that violate our community guidelines will be removed. Commenters who repeatedly violate community guidelines may be suspended, causing them to temporarily lose their ability to engage with comments.

Read our community guidelines here

Discussion loading ...

Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.
Cannabis pro newsletter