May 3, 2012 / 2:13 PM / in 6 years

UPDATE 2-Valeant shares fall as market cools on forecast

(Recasts with slide in shares. Amounts in US dollars unless noted)

May 3 (Reuters) - Shares of Valeant Pharmaceuticals International Inc tumbled 9 percent on Thursday after at least one analyst cast doubts about an earnings forecast that initially triggered a sharp rise in the Canadian drug company’s shares.

Cash earnings reported by Valeant, which has been on an acquisition spree, benefited from one-off gains from the sale of a dermatology asset and a foreign exchange transaction, said Neil Marouka, an analyst at Canaccord Genuity.

“When they provided clarity on some of the gains included in the cash EPS calculation, it became apparent that the quarter was a little bit weaker than expected,” Marouka said.


For Factbox on Valeant’s acquisitions:


As a result, the increased forecast for earnings per share for the year was also closer to 25 cents than 50 cents, the number quoted by Valeant, he said.

The stock had risen as much as 6 percent to a nine-year high after the company raised its 2012 cash earnings forecast by 50 cents a share to a range of $4.45 to $4.70. It raised its revenue forecast to a range of $3.4 billion to $3.6 billion, from $3.1 billion to $3.4 billion.

Marouka said the dermatology asset sale was worth about 15 cents a share and the foreign exchange gain, from an inter-company loan, was worth about 10 cents.

By mid-afternoon, Valeant’s stock was down 9.4 percent at C$50.49 on the Toronto Stock Exchange. The stock has risen by about 43 percent in the past six months.

Valeant reported cash earnings per share of 99 cents per share, ahead of the 98 cents a share that analysts were expecting, according to Thomson Reuters I/B/E/S.

Valeant, which has made a raft of acquisitions this year, also said it would buy some assets from skincare products maker University Medical Pharmaceuticals Corp for about $64 million. The deal will close by the middle of 2012, Valeant said in a statement on Thursday.

On a GAAP basis, Valeant reported a net loss for the first quarter of $12.9 million, or 4 cents a share. That compared with a net income of $6.5 million, or 2 cents, a year earlier.

Revenue rose 52 percent to $856 million. (Reporting by Nicole Mordant in Vancouver and Maneesha Tiwari in Bangalore)

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