Valeant Pharmaceuticals stock bounces higher after news it is restating two years

The stock had fallen more than $25 per share in the previous three sessions, including $12.84 on Monday amid concern that a financial restatement was in the works and its fourth-quarter results could be delayed.Valeant announced late Monday that a restatement of results will be required but said it would discuss unaudited fourth-quarter results next week.At least one analyst said that it could be costly for Valeant to fix its financial reporting systems but other analysts said the Philidor restatement itself is not a major concern.Valeant estimated the company’s 2014 earnings will be reduced by 10 cents per share, in U.S. currency, and 2015 earnings will be increased by nine cents per share compared with pre-restatement numbers.The amounts involved are tiny compared with Valeant’s total revenue and profit in 2014. It reported US$8.3 billion of revenue and US$1.56 per share of earnings for the 12 months ended Dec. 31, 2014.Interim CEO Howard Schiller said in a news release that the delay in filing audited full-year results was “very disappointing but necessary.”Vicki Bryan, an analyst with corporate bond research company Gimme Credit, wrote that restatement supports concerns she and others have about Valeant’s “persistently poor disclosures and liberally opaque and inconsistent accounting, the financial impact to fix the problems could be significant.”However, RBC Capital Markets analyst Douglas Miehm wrote the risk posed by Philidor is mostly mitigated, except for potential penalties. He said the successful implementation of a program with Walgreens to replace Philidor satisfies operational concerns. Walgreens is one of the biggest pharmacy retail chains in the United States.Neil Maruoka of Canaccord Genuity said the market will continue to view everything about Valeant through a lens of suspicion but “we do not believe that the restatement is a major concern at this point, and we await the final conclusions from the internal investigation.” MONTREAL — Valeant Pharmaceuticals shares got a positive bounce Tuesday after the company announced that its restatement of financial results for 2014 and 2015 involves just US$58 million of sales to Philidor that were recognized at the wrong time.The Quebec-based company said late Monday that it should have recognized the revenue when the products were dispensed to patients, rather than when delivered to Philidor — an associated company that sold some Valeant drugs before the two companies parted ways last October.Valeant stock (TSX:VRX) rose about 10 per cent from Monday’s close, gaining $10.19 to $114.35 at noon on the Toronto Stock Exchange.More than $6 billion has been wiped off Valeant shares since ThursdayThe behemoth, the biotech and the break fee: How a small Canadian firm ended up in a legal battle with Valeant Pharmaceuticals International IncDocuments detail Turing, Valeant strategy to buy life-saving drugs, then hike prices to squeeze more profitBloomberg read more