The last time that Valeant Pharmaceuticals reported its quarterly results was literally the last time. That's because the drugmaker changed its name to Bausch Health Companies Inc. (NYSE: BHC) on July 13, 2018. The company ended its time as Valeant on a positive note , with better-than-expected revenue and organic growth for its two largest segments in the first quarter of 2018.
Bausch Health reported its second-quarter results before the market opened on Tuesday, and they revealed that the momentum from earlier in the year continued. Here are the highlights.
Bausch Health results: The raw numbers
|Metric||Q2 2018||Q2 2017||Year-Over-Year Change|
|Sales||$2.128 billion||$2.233 billion||(4.7%)|
|Net income from continuing operations||($873 million)||($38 million)||N/A|
|Earnings per share||($2.49)||($0.11)||N/A|
Data source: Bausch Health.
What happened with Bausch Health this quarter?
Although Bausch Health's second-quarter revenue fell from the prior-year period, there was some good news. The year-over-year comparison was hurt by divestitures and discontinuations last year totaling $183 million and helped a bit by roughly $25 million due to the favorable impact of foreign exchange fluctuations. Excluding these factors, Bausch's revenue increased 3% organically over the second quarter of 2017.
The strongest performance came from the company's Salix business segment. Revenue for the segment totaled $441 million in the second quarter, up 14% on a reported basis and organically. Higher sales for gastrointestinal drugs Xifaxan and Relistor helped drive growth for the segment.
Bausch Health's largest business unit, Bausch + Lomb/international, posted second-quarter revenue of $1.2 billion, a decline of $14 million, or 1%, from the prior-year period. However, excluding divestitures and discontinuations of $84 million and a positive foreign exchange impact of $25 million, the segment's revenue increased by 4% year over year. The segment's results were boosted by launches of new products, including Lumify, which achieved a market share of 21% among eye redness relievers.
The company still had its weak spots, though. Revenue for its ortho dermatologics segment was $142 million in the second quarter. That reflected a 12% year-over-year decline on a reported basis and an 11% drop organically. Revenue for the diversified products segment fell 27% on a reported basis and decreased by 8% organically from the prior-year period to $336 million.
Bausch Health's bottom-line performance worsened, but it's not as bad as it looks. The wider net loss stemmed in large part from an increase in the provision for income taxes of $343 million. Other contributing factors included an asset impairment associated with the loss of exclusivity of a key product and an increase in amortization of intangible assets.
What management had to say
Joseph Papa, chairman and CEO of Bausch Health, stated: "For a second consecutive quarter, the Company delivered overall organic growth, driven by solid results in our Salix and Bausch + Lomb/International segments, which together represented approximately 78% of our business in the quarter. Growth in the Salix segment reflects higher sales of our promoted brands, most notably Xifaxan and Relistor, while organic growth in the Bausch + Lomb/International segment was primarily due to volume increases and strong growth across Europe and China."
Thanks to its relatively good second-quarter performance, Bausch Health raised its full-year 2018 adjusted EBITDA guidance. The company now expects adjusted EBITDA between $3.2 billion and $3.35 billion in 2018, up from its previous guidance of $3.15 billion to $3.30 billion.
Bausch still expects full-year 2018 revenue between $8.15 billion and $8.35 billion. Papa stated that the company was maintaining this guidance "despite significant foreign exchange headwinds."
New products could continue to help improve revenue. Year-over-year comparisons could also begin to look better in future quarters as Bausch Health moves past the overhang of previous divestitures and discontinuations.
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