Valeant Pharmaceuticals Intl Inc (NYSE: VRX) stock spiked higher by more than 15 percent on Tuesday morning after the company reported better-than-expected first-quarter revenue and raised its full-year guidance. Valeant also said it will change its name in July as the company attempts to move on from allegations of predatory drug pricing and investigations into its accounting practices.
On Tuesday, Valeant reported adjusted first-quarter earnings per share of 88 cents on revenue of $1.99 billion. Both numbers beat consensus analyst estimates of 60 cents and $1.95 billion, respectively. Revenue was down 5.4 percent compared to a year ago.
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Valeant reported a first first-quarter net loss attributable to the company of $2.69 billion after reporting a $628 million gain in the same quarter a year ago. The company reduced its debt by $280 million in the first quarter as it continues to pay down more than $25 billion in long-term debt.
“For the first time since 2015, the company delivered overall organic revenue growth that tracked above expectations and was driven by our Branded Rx and Bausch and Lomb/International segments,” CEO Joe Papa says.
Looking ahead, Valeant raised its full-year 2018 revenue guidance from a previous range of between $8.1 billion and $8.3 billion to a new range of between $8.15 billion and $8.35 billion. The company also raised its full-year earnings before interest, taxes, depreciation and amortization guidance from a previous range of between $3.05 billion and $3.2 billion to a new range of between $3.15 billion and $3.3 billion.
Valeant also announced it will be changing its name to Bausch Health Companies in July and will begin trading under the stock ticker BHC.
Even after the big Tuesday rally, Valeant stock is down more than 90 percent in the past three years, and analysts say it will take more than a name change to fix the stock.
Morningstar analyst Michael Waterhouse says he is not optimistic that Valeant’s drug pipeline can offset its shrinking businesses in the long term.
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“Valeant walks an extremely thin line on secured debt covenants, which could theoretically tip it into technical default if product launches don’t pan out, litigation costs spiral out of control, or asset sales don’t receive sufficient multiples,” Waterhouse said last month.
Morningstar has an “overvalued” rating and $13 fair value estimate for VRX stock.
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Valeant Pharmaceuticals Intl Inc (VRX) Stock Is Still A Gamble originally appeared on usnews.com
