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Bausch's (BHC) Q1 Earnings Beat Estimates, Revenues Miss

Zacks Equity Research
·4-min read

Shares of Bausch Health Companies Inc. BHC were down 11.1% after it reported mixed results for first-quarter 2021.

The stock has gained 33.7% in the year so far against the industry’s decline of 0.4%.

The company’s adjusted earnings per share of $1.04 easily beat the Zacks Consensus Estimate of 94 cents and increased from 89 cents reported in the year-ago quarter.

Total revenues of $2 billion missed the Zacks Consensus Estimate by 2.10% but increased 1% year over year. Revenue was negatively impacted by approximately $100 million in the first quarter of 2021 due to the COVID-19 pandemic.

Quarter in Detail

Effective the first quarter of 2021, the company operates in the following reportable segments — Bausch + Lomb, Salix, International Rx, Ortho Dermatologics and Diversified Products.

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Revenues in the Bausch + Lomb segment were $881 million, up 1% year over year. Excluding the favorable impact of $26 million from foreign exchange and the impact of divestitures and discontinuations of $2 million, the Bausch + Lomb segment decreased organically by approximately 2% year over year, primarily due to the impact of the COVID-19 pandemic.

Bausch Pharma (comprising Salix, International, Ortho Dermatologics and Diversified Products) revenues were $1.146 billion, up 1% year over year. Among these, Salix segment revenues came in at $472 million, down 1%. The decline was primarily driven by the impact of the COVID-19 pandemic. Xifaxan sales declined 2% year over year.

International Rx segment revenues in the quarter were $306 million, up 5%.
Ortho Dermatologics segment revenues were $141 million for the quarter under review, up 8% year over year. The Ortho Dermatologics segment grew organically by approximately 5%, primarily owing to sales of the Thermage franchise.

Diversified Products segment revenues were $227 million, down 5% from the year-ago quarter, primarily due to the loss of exclusivity of certain products.

During the quarter, the company repaid debt by approximately $200 million.

2021 Guidance Reiterated

Revenues are projected to be $8.60-$8.80 billion for this year.

Planned Separation of Eye Health Business

The company announced that Joseph C. Papa and Sam Eldessouky will serve as the CEO and CFO, respectively, of Bausch + Lomb upon separation of the Bausch + Lomb eye health business. In addition, the company continued to make progress toward internal objectives necessary for the separation, including operating in five reportable segments beginning the first quarter of 2021.

Our Take

Bausch beat on earnings in the first quarter but missed on sales due to pandemic woes. Nevertheless, management stated that many of their leading products have increased market share in key markets. The company intends to spin off its eye health business into an independent public company and is making progress toward internal objectives necessary for the separation.

Bausch Health Cos Inc. Price, Consensus and EPS Surprise

Bausch Health Cos Inc. price-consensus-eps-surprise-chart | Bausch Health Cos Inc. Quote

Zacks Rank & Stocks to Consider

Bausch currently carries a Zacks Rank #4 (Sell).

Some better-ranked stocks in the healthcare space are Ironwood Pharmaceuticals, Inc. IRWD, Nabriva Therapeutics NBRV and Pacira BioSciences PCRX, which currently carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Earnings estimates for Ironwood Pharmaceuticals moved up 2 cents for 2021 in the past 30 days.

Loss estimates for Nabriva have narrowed by 8 cents for 2021 in the past 30 days.

Earnings estimates for Pacira rose 6 cents for 2021 in the past 30 days.

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Zacks Investment Research