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Bausch Health Companies Raised Its Earnings Guidance

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EBITDA guidance

In the first-quarter earnings investor presentation, Bausch Health Companies (BHC) raised its fiscal 2019 adjusted EBITDA guidance from $3.35 billion–$3.50 billion to $3.40 billion–$3.55 billion. Compared to the previous adjusted EBITDA guidance announced in February, the company assumed an incremental negative impact of $5 million associated with FX movements, zero impact due to loss of exclusivity, and zero impact due to Trulance sales in its new adjusted EBITDA guidance.

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Bausch Health Companies has assumed an incremental adjusted EBITDA impact of $55 million associated with its base business in the new fiscal 2019 EBITDA guidance. According to the company’s first-quarter earnings conference call, the EBITDA improved due to the gross profit on incremental $25 million revenues earned by the base business in accordance with the new revenue guidance. Also, higher gross margins and lower SG&A expenses are expected in fiscal 2019.

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Analysts expect Bausch Health Companies’ adjusted EBITDA to change YoY (year-over-year) by -0.30% to $3.46 billion in fiscal 2019, 2.13% to $3.54 billion in fiscal 2020, and 5.00% to $3.71 billion in fiscal 2021.

Analysts also expect Bausch Health Companies’ adjusted EBITDA to change YoY by 1.25% to $878.81 million in the second quarter, -5.29% to $867.56 million in the third quarter, and 1.65% to $872.13 million in the fourth quarter of fiscal 2019.

Trulance relaunch strategy

According to the company’s first-quarter earnings conference call, Bausch Health Companies plans to invest resources for the relaunch of Trulance in fiscal 2019. The company also plans to improve the drug’s cost of goods sold metric, which is close to 30% of the net sales. Increased promotional spending is expected to enable Trulance to become a meaningful revenue and earnings contributor for Bausch Health Companies beyond fiscal 2020.

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