Valeant Pharmaceuticals International (VRX) Monday reported a sharp decline in net profit for the third quarter of fiscal 2009. Income from continuing operations increased from the prior year, as revenues rose 31%. The company also raised its full year 2009 cash earnings per share guidance.
For the third quarter, the Aliso Viejo, California-based company's net earnings plunged to $37.28 million or $0.44 per share from $202.89 million or $2.31 per share in the prior year quarter.
Income from continuing operations for the period was $37.63 million or $0.45 per share compared with a loss of $7.26 million or $0.08 per share in the 2008-year period.
On an adjusted cash earnings per share basis, income from continuing operations was $48.8 million or $0.58 per share compared with $16.7 million or $0.19 per share in the previous year. During the period, Valeant incurred a loss of $354 thousand or $0.01 per share from discontinued operations, versus an income of $210.15 million or $2.39 per share in the year-ago period.
On an average, six analysts polled by Thomson Reuters expected the company to earn $0.49 per share for the quarter. Analysts' estimates typically exclude special items.
Total revenues for the period increased to $220.32 million from $168.42 million in the third quarter of fiscal 2008. Analysts expected Valeant to generate revenues of $193.53 million during the quarter.
On a segmental basis, specialty pharmaceuticals product sales was $101.62 million versus $70.12 million in the prior year. Revenues from product sales in Branded Generics - Latin America fell to $40.68 million from $42.63 million, and revenues from product sales in Branded Generics - Europe were $40.23 million compared to $40.43 million a year earlier.
At constant exchange rates, Specialty Pharmaceuticals product sales, product sales in Latin America, and product sales in Europe increased 47%, 19%, and 29% respectively from the 2008-year period.
Ribavirin royalties in the quarter were $12.2 million as compared to $15.2 million in the third quarter of 2008. Valeant attributed the decrease to expiration of royalty terms in certain European countries on ten-year anniversary of product launches in respective countries.
During the three-month period, operating expenses incurred by the company rose slightly to $152.79 million from $152.41 million in the corresponding period prior year. Selling, general and administrative costs declined 6% to $67.2 million from $71.5 million in the third quarter of 2008, reflecting benefit of cost reduction activities and exchange rates, partially offset by increased costs attributable to acquisitions.
In the third quarter, Valeant incurred a one-time cost of services totaling $4.05 million. Restructuring and asset impairment and disposition charges amounted to $307 thousand compared to $3.53 million in the prior year. During the three-month period, the company had a tax provision of $15.55 million versus a benefit of $148 thousand a year earlier.
In the preceding second quarter, Valeant had reported a net income of $32.86 million or $0.39 per share compared to a loss of $78.33 million or $0.87 per share in the same quarter last year. Total revenues for the second quarter had increased to $191.7 million from $153.56 million in the second quarter of fiscal 2008.
For the nine-month period, the company's net income was $101.34 million or $1.21 per share versus $130.36 million or $1.46 per share in the same period last year. Income from continuing operations was $101.47 million or $1.21 per share compared with a loss of $56.78 million or $0.64 per share in the 2008-year period. Year-to-date revenues surged to $589.94 million from $473.96 million in the prior year.
Looking ahead, for the full year 2009, Valeant raised its cash earnings per share guidance to a range of $2.10 to $2.20 per share from its prior range of $1.90 to $2.10 per share. Analysts currently expect the company to earn $2.00 per share on revenues of $770.40 million for fiscal 2009.
In Monday's regular trading session, VRX is currently trading on the New York Stock Exchange at $30.13 per share, up $0.73 or 2.76% on a volume of 492,901 shares. In the past 52-week period, the shares have been trading in a range of $15.64 to $32.00.
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