Valeant showing signs of recovery
Q2 results to be released
Ex-darling Valeant Pharmaceuticals is hoping to put its annus horribilis in the rear-view mirror when it reports its second-quarter results Tuesday.
The Quebec-based drugmaker was the most valuable company in Canada by market capitalization a year ago, but has since seen nearly 90 per cent of its value evaporate and changed CEOs as it struggles to rebuild public and investor trust.
New chairman and chief executive Joseph Papa has reduced Valeant’s 2016 earnings guidance after enduring scrutiny from U.S. government investigations, delayed financial results, an earnings restatement and public grillings over alleged price gouging.
Valeant’s latest quarterly results are expected to be modestly better than the first quarter — but dramatically lower compared to 2015.
Revenues are forecast to drop 10 per cent to US$2.46 billion, according to analysts polled by Thomson Reuters. Adjusted profits are expected to plummet to US$512.44 million or $1.48 per share, from US$897.1 million or $2.56 per share a year ago.
The company is expected to earn US$149.5 million or nine cents per share including one-time items, reversing a US$53 million or 15 cents a share loss a year ago.
Papa announced on Monday that he’s brought in new faces to top management and expanded the roles of some senior executives.
Scott Hirsch was appointed to replace long-standing spokeswoman Laurie Little. Valeant’s communications and investor relations had been criticized by major investor Bill Ackman of Pershing Square Capital, who has joined the company’s board of directors.
“As we develop our strategic plan to create the new Valeant, we’re adding top talent to the leadership team, promoting highperforming leaders from within, and creating new structures and processes to help strengthen operations as we move forward,” Papa said.
Industry analysts remain cautious about Valeant’s prospects, fearing Valeant’s US$30 million debt and the potential for loan covenants to be breached if “fundamentals” don’t improve.