Shares of Bausch Health Companies Inc (BHC) plummeted 5.01% in Wednesday's trading session, as investors reacted to the disappointing third-quarter results from its majority-owned subsidiary, Bausch + Lomb. The sharp decline came despite pre-earnings options activity that had implied an 8.2% move in either direction, highlighting the market's negative surprise at the report.
Bausch + Lomb, the eye-health company controlled by Bausch Health, swung to a loss in the latest quarter, despite reporting revenue growth across its business segments. The company recorded a net loss of $28 million, or 8 cents per share, compared to a profit of $4 million, or 1 cent per share, in the same period last year. This unexpected loss appears to have sparked concerns about the overall financial health of Bausch Health Companies.
While Bausch + Lomb's revenue increased by 7.1% to $1.28 billion, in line with analysts' expectations, the market seems to have focused on the bottom-line performance. The company's transition from profit to loss, primarily due to a rise in income tax provisions, has likely raised questions about the parent company's ability to manage costs and maintain profitability across its portfolio of businesses. This negative sentiment appears to have driven the significant sell-off in Bausch Health's stock.
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