Valeant: From bad to worse
- Valeant Pharmaceuticals reported third quarter earnings on Election Day morning, possibly hoping to bury the dismal forecast, lowering sales guidance once again.
- The company now expects earnings of $5.30 to $5.50 a share for 2016 on revenues of $9.55 billion to $9.65 billion, down from a previous range of $6.60 to $7 per share on sales of $9.9 billion to $10.1 billion.
- While the company didn't give guidance for 2017, newly appointed Chief Financial Officer Paul Herendeen told investors on the Tuesday morning call that they can expect next year to be worse.
Valeant has been trying — and largely failing — to earn back investor trust after more than a year plagued by scandal.
One of its newest hires, CFO Herendeen who joined the company in August, dominated the earnings call on November 8, telling investors that the company is going to do its best to be more transparent.
"I think of our guidance as a commitment," he said. " If you ask me how I feel about the quality of the revised guidance, I will tell you I feel good about it, not the level certainty, but the quality of the estimate. There could still be surprises yet to be discovered — not trying to alarm anyone or walk away from our revised guidance — I'm just letting you know that as time passes our confidence in our forecast and our guidance will improve."
Unpredictability reigned at Valeant as analysts inquired about rumors the Canadian company will continue selling off assets and potentially divest its Salix business, which it bought last year for more than $11 billion and includes its top-selling product Xifaxan.
Valeant declined to comment on the speculation, but Herendeen added, "What people don't often think about is the disposition of owned assets. I'd say part of our job is to know the value of assets we own. If we believe an asset may be worth more in someone else's hands and they will pay us more than what it is in our hands, we should sell that asset."
"In a nutshell, if someone offers us a value that exceeds having the asset in our hands we should sell that asset. It's simple. Let me be clear, our preference is to keep the businesses we identify as core, but not at all cost," he added.
- Valeant Statement
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