Valeant Pharmaceuticals International Inc. (NYSE: VRX) reported first-quarter 2017 results before markets opened Tuesday. The company reported quarterly diluted earnings per share (EPS) of $1.79 and revenues of $2.11 billion. In the same period a year ago, Valeant reported a loss per share of $1.08 on revenues of $2.37 billion. First-quarter results also compare to the Thomson Reuters consensus estimates for EPS of $0.60 and $1.59 billion in revenues.
Adjusted EBITDA totaled $861 million, compared with a net loss of $374 million in the year-ago quarter. The company benefited from a one-time tax benefit of $908 billion related to noncash internal restructuring. Net income also included a loss of $64 million on early extinguishment of debt and a $47 million increase in interest expense.
Lower revenues were attributed to reduced volumes in the company’s U.S. Diversified Products and Branded Rx segments resulting from the loss of exclusivity on “a number” of products and “challenging market dynamics.” Revenues were also negatively affected by foreign currencies, divestitures and discontinuations, and a modest decrease in average realized pricing.
CEO Joseph C. Papa commented:
Our first quarter performance demonstrates that we are delivering on our commitments. We met our internal expectations, and we are continuing to make progress on our key initiatives, focus on the turnaround of our core businesses and improve internal operating efficiencies. Our divestiture efforts and cash flow generation have led to a $3.6 billion reduction in total debt to date, since the end of the first quarter of 2016, and our successful debt refinancing provides us with a more comfortable maturity profile.
In its outlook statement, Valeant raised its estimate for 2017 adjusted EBITDA from a range of $3.55 billion to $3.70 billion to a new range of $3.60 billion to $3.75 billion. The guidance includes the impact of sales of certain skin-care brands but does not include the impact of the sale of the Dendreon business, which is expected to close midyear.
Activist investor Bill Ackman’s Pershing Square Management dumped its entire stake (more than 18 million shares) in Valeant in mid-March, taking a loss of more than 95%. Shares traded at an all-time high over $250 in mid-2015.
The better-than-expected results combined with the debt reduction and the improved guidance sent shares sharply higher in Tuesday’s premarket session. The stock traded up about 12.3%, at $10.90 in a 52-week range of $8.31 to $32.74.