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What to Expect from Valeant’s Upcoming Q216 Earnings

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Nov. 20 2020, Updated 4:00 p.m. ET

Revenue expectations

According to a company press release, Valeant Pharmaceuticals International (VRX) will announce its 2Q16 earnings on August 9, 2016. Wall Street analysts anticipate that Valeant will record $2.47 billion and $2.54 billion total revenue for 2Q16 and 3Q16, respectively. That translates to a yearly negative sales growth of 9.6% and 9%, respectively, for those quarters.

The company’s struggling dermatology and gastrointestinal business has been the major reason behind the underperformance. For details on VRX’s core business, please read A Close Look at Valeant’s Core Business.

To understand the factors behind Valeant’s lower sales expectations in 2016, please read Why Did Valeant Lower Its Guidance for 2016?

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Is Valeant’s revenue growth in line with peers?

In the specialty pharmaceutical industry, Valeant’s competitor Mallinckrodt (MNK) is expected to report a revenue decline of 4.6% in its upcoming 3Q16 earnings release. A continued weakness in MNK’s specialty generics business is the reason for this revenue decline.

In 2Q16, Shire (SHPG) is expected to report revenue growth of 45.9%. Endo International’s (ENDP) revenue is expected to increase 17.6%. Shire’s neuroscience and genetic franchise is the driver behind its robust growth.

With the loss of patent exclusivity to Voltaren, Endo has suffered and lowered its 2016 revenue guidance. However, with strong growth in branded pharmaceutical sales in the United States, ENDP is expected to report growth.

It’s often risky to directly invest in a biotechnology company, since any news release for the success or failure of its drugs results in volatility for the stock. So to stay on the safer side, you can invest in the Vanguard FTSE All-World ex-US ETF (VEU). VEU holds 0.02% of its total holdings in Valeant.

In the next part of the series, we’ll take a look at Valeant’s recent wins, which might support revenue growth.

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