MONTREAL — Valeant Pharmaceuticals International Inc. posted its highest quarterly net profit in three years but its shares slumped as its adjusted earnings slumped.
The Quebec-based drug company said it earned US$513 million or $1.45 per diluted share attributable to shareholders in its latest quarter, compared with a loss of US$515 million or $1.47 per share a year ago.
The profit was the highest since the fourth quarter of 2014, before its share price collapsed on allegations of improper conduct by former senior executives.
“After working to stabilize the company, we’re now well into the second phase of the plan turnaround to where we’re taking steps to drive shareholder value,” CEO Joseph Papa said Wednesday during a conference call.
On an adjusted basis, the company said it earned US$347 million or 98 cents per diluted in the quarter. That’s in line with analyst forecasts but is down from US$443 million in the fourth quarter of 2016.
Valeant cut its debt by 15 per cent in one year to US$25.7 billion.
Since the first quarter of 2015, it has reduced total debt by more than US$6.7 billion, partially from the sale of non-core assets.
While it will continue to eye opportunities for more divestitures, Papa said Valeant spins off lots of cash, some of which will be used to further cut debt.
Revenue for the three months ended Dec. 31 totalled US$2.16 billion down 10 per cent from US$2.40 billion a year earlier.
Nine percentage points of the lower revenues came from sold assets.
Valeant’s shares were down about 11 per cent at C$21.13 in morning trading on the Toronto Stock Exchange.
Douglas Miehm of RBC Capital Markets said that while the results were in line with expectations, next year’s outlook was slightly below forecasts.
“We view the guide as conservative and will look to the underlying assumptions behind management’s outlook,” he wrote in a report.
In its outlook for 2018, Valeant said it expects revenue of US$8.1 billion to US$8.3 billion.
Full-year adjusted earnings before interest, taxes, depreciation and amortization are forecast in a range of US$3.05 billion to US$3.2 billion.
For the full year, Valeant said it earned US$2.4 billion on US$8.72 billion of revenues. That compared with a US$2.4-billion loss on US$9.67 billion of revenues in 2016.
The adjusted profit of US$1.35 billion was down from US$1.92 billion a year earlier.
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Companies in this story: (TSX:VRX)
Ross Marowits, The Canadian Press