Valeant writes down Salix value, posts $1.22B loss
Revenue decline blamed on lower product sales, currency exchange rates and divestitures.
MONTREAL — Valeant Pharmaceuticals is reporting a third-quarter loss of US$1.22 billion, mainly tied to a writedown of Salix – a company acquired last year.
The Montreal-based pharmaceutical company, which reports in US currency, says the net loss was equal to $3.49 per share, which contrasted to a profit of $49.5 million or 14 cents per share in the third-quarter of 2015.
The third quarter of 2015 marked the beginning of a series of troubles that have driven down the value of Valeant’s stock, which had soared after the Salix acquisition was announced in February 2015.
Valeant’s revenue has also fallen, to US$2.48 billion from $2.79 billion. Valeant said the 11% decline from year to year was primarily because of lower product sales as well as currency exchange rates and divestitures.
After adjustments that exclude the writedown of Salix goodwill and other items, Valeant earned US$543.0 million or $1.55 per share, down from US$844.7 million or $2.41 per share.
The company noted that its adjusted earnings have improved each quarter this year. However, Valeant says it’s reducing its estimates for 2016 adjusted earnings and revenue from its previous guidance.
Valeant’s revised estimate for 2016 revenue is $9.55 billion to $9.65 billion, down from $9.9 billion to $10.1 billion. Adjusted earnings per share is now estimated at between $5.30 and $5.50 per share, down from $6.60 to $7 per share.