What happened
Shares of healthcare name Bausch Health Companies (BHC -0.69%) are lower by 24.9% as of 12:30 p.m. ET on Tuesday, in response to a surprisingly disappointing first-quarter report.
So what
For the three-month stretch ending in March, the pharmaceutical company reported a loss under generally accepted accounting principles (GAAP) of $69 million, improving on the $610 million loss booked for the comparable quarter a year earlier. The reported loss of $0.19 per share missed analysts' expectations for a gain of $1.03, however. Although the company was able to produce adjusted profit of $263 million, that's still down from the year-earlier figure of $370 million.
As for revenue, the top line of $1.9 billion not only fell 5% year over year, but it missed analysts' estimates of $2.04 billion. Most of the company's operating units, in fact, reported a decline in sales.
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Business isn't expected to dramatically ramp up anytime soon, either. Bausch Health Companies believes it will now generate revenue of between $8.25 billion and $8.4 billion this full fiscal year, versus a consensus of just under $8.6 billion.
Now what
In some regards, the first-quarter stumble is forgivable. The spinoff of Bausch + Lomb (NYSE: BLCO) has been in the works for some time, and should only be finalized today. Such transactions require attention as well as money even before they're completed. Bausch Health also divested Amoun Pharmaceutical in the middle of last year, skewing the year-over-year revenue comparison. On an organic basis, the company fared better than the reported numbers would suggest. And sure, with today's big setback carrying shares to a multiyear low that's nearly 80% below last March's high, there's a chance this could be a "can't get any worse" moment for the stock. This might be an entry opportunity for speculators that can stomach the risk.
Even stripping out the impact of the sale of Amoun Pharmaceutical and the spinoff of Bausch + Lomb, Bausch Health isn't doing especially well. Most investors will want to steer clear at least until there's more clarity as to how it will perform in its current form, and how it will perform in an environment made less complicated by an easing of the COVID-19 pandemic.
