Valeant misses Wall Street expectations and dials back future earnings forecasts sending the share price sharply south
The worst isn't over for Valeant Pharmaceuticals.
The struggling company, which has recorded a near 90 per cent drop in its share price over the last year, has posted a first-quarter loss of $373.7m (£253m) in the first quarter.
Investors have been left reaching for the painkillers as the stock price slumps almost 20 per cent in the pre-market on revised earnings forecasts.
Valeant's share price hit a high of $263.70 in August of 2015 and fell as low as $25.27 in April of 2016 due to doubts that the company could recover from its hefty debt load and concerns over its accounting practises.
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Valeant today dialled back expectations – now forecasting $6.60 to $7 a share for the full year, down sharply from its previous guidance for $8.50 to $9.50.
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Revenue has been scrubbed to $9.9bn to $10.1bn for the year, down from $11bn to $11.2bn. As recently as March of this year Valeant was forecasting earnings of $13.75 a share and revenue as high as $12.7bn.
The Canadian drug maker fell short of Wall Street expectations over its first quarter with a loss of $1.08 per share. Earnings, adjusted for one-time gains and costs, were $1.27 per share.
The average estimate of nine analysts surveyed by Zacks Investment Research was for earnings of $1.42 per share.
Revenue performed better than expected however, with the company pulling in $2.37bn, up 9.3 per cent, on forecasts of $2.35bn.
Valeant is having to prove to investors it's still able to bring in earnings as it positions itself away from the big acquisitions and hefty drug-price hikes that made it the pharma giant it is.
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It was announced last month that Michael Pearson, the former Valeant chief executive that was ousted from the company earlier this year, will remain on as a consultant.
He will also pocket a $9m (£5m) severance payment.
Pearson, who since he was appointed CEO in 2008 steered Valeant through a 1,000 per cent share price increase and subsequent collapse, formally left the company in early May after clashing with investors and board members.