BHC Q2 Earnings Beat Estimates on Salix and Solta Growth, '26 View Raised

Growth was led by Salix, Solta Medical and Bausch + Lomb, while Xifaxan revenues climbed 26%.

Excluding foreign exchange effects of $25 million, acquisitions of $35 million and divestitures and discontinuations of $7 million, total revenues increased 11% organically.

BHC’s shares have lost 32.7% year to date compared with the industry’s decline of 1.3%.

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The company reports revenues under two segments: Bausch Health and Bausch + Lomb.

Bausch Health’s revenues amounted to $1.46 billion, up 16% year over year. Within the Bausch Health segment, revenues are recorded under four divisions — Salix, International, Solta Medical and Diversified Products.

Bausch Health's Salix Momentum

Salix revenues totaled $758 million, increasing 21% year over year on both reported and organic basis. Xifaxan remained the primary growth engine, with revenues rising 26% to $664 million on higher realized net pricing, volume growth in existing channels and residual Medicaid volume.

Relistor revenues declined 13% to $41 million due to lower volume. Trulance revenues increased 14% to $41 million, benefiting from improved pricing despite lower volume.

Salix’s revenues beat the Zacks Consensus Estimate of $646 million and our model estimate of $644 million.

BHC's International and Solta Growth

International revenues increased 10% to $305 million, while organic growth was 5%. The reported figure beat the Zacks Consensus Estimate of $292 million and our model estimate of $291.5 million.

EMEA revenues rose 12% to $155 million and delivered a 14th consecutive quarter of organic growth. Latin America revenues jumped 30% to $83 million, supported by established and newly launched products.

Solta Medical revenues surged 38% to $176 million, aided by the acquisition of the company’s full-service distributor in China. The figure beat the Zacks Consensus Estimate of $170 million but missed our model estimate of $185 million.

Organic growth was 12%, led by Asia-Pacific strength. Thermage revenues increased 42%, while Clear + Brilliant revenues rose 17%.

BHC had earlier acquired Shibo’s full-service aesthetics distribution business in China. The acquisition expands its geographic footprint, provides direct access to a large and growing customer base, and enhances its ability to meet rising demand for aesthetic treatments, boosting the long-term growth potential of its global aesthetics franchise.

BHC’s Diversified Segment Performance

Diversified segment revenues amounted to $219 million, flat year over year. This segment revenues beat the Zacks Consensus Estimate of $200 million and our model estimate of $185 million.

Within this segment, neuroscience sales increased 17% year over year, driven by favorable net pricing, partially offset by volume decline.

The Dermatology business was down 15% to $47 million due to lower volumes across mature and promoted products. Sales from the Dentistry business amounted to $20 million, down 20%. The Generics business generated sales of $14 million, down 33%.

BHC’s B&L Segment Q2 Performance

Bausch + Lomb revenues advanced 9% to $1.39 billion. Excluding foreign exchange, acquisitions and divestitures and discontinuations, the segment posted organic growth of 8%, reflecting gains across its Vision Care, Surgical and Pharmaceuticals businesses.

The figure beat both the Zacks Consensus Estimate and our model estimate of $1.34 billion.

A look at BHC’s Q2 Margins

Adjusted gross profit increased 16% to $2.08 billion. The adjusted gross margin expanded 230 basis points to 72.9%, while total adjusted operating expenses increased 6% to $1.08 billion. Adjusted cash flows from operations rose 44% to $637 million.

Bausch Health Raises 2026 Guidance

BHC raised its 2026 consolidated revenue outlook to $10.79-$11.04 billion from $10.67-$10.92 billion. Adjusted EBITDA is now projected to be between $4.05 billion and $4.18 billion, up from the previous guidance of $3.89-$4.01 billion.

Excluding Bausch + Lomb, revenues are expected to be between $5.35 billion and $5.50 billion, implying growth of 4-6%, and up from the earlier projected range of $5.25-$5.40 billion.

BHC’s Pipeline Development

The registrational phase III program on larsucosterol to evaluate the safety & efficacy in patients with severe Alcohol-Associated Hepatitis (AH) was initiated in early 2026.

The FDA had earlier granted Breakthrough Therapy Designation to larsucosterol for the treatment of AH.

An internal review on amiselimod, a once-daily oral treatment of mild- to moderate ulcerative colitis, is ongoing.

The company’s program for Clear and Brilliant Touch, a fractionated laser device for skin rejuvenation, is also advancing.

Our Take on BHC’s Q2 Performance

BHC put up a strong performance in the second quarter driven by Salix and Solta businesses. Xifaxan continues to drive growth.

Consequently, the company raised its annual guidance.

BHC’s efforts to reduce its massive debt is also encouraging. On a consolidated basis, cash and cash equivalents totaled $1.83 billion, up from $1.31 billion at the end of 2025. Consolidated debt at principal value was $20.24 billion, while net consolidated debt totaled $18.41 billion.

BHC’s Zacks Rank & Stocks to Consider

Bausch currently carries a Zacks Rank #5 (Strong Sell).

Some better-ranked stocks in the sector are Harmony Biosciences HRMY, Liquidia Corporation LQDA and Amarin AMRN, each currently sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Over the past 60 days, estimates for Harmony Biosciences’ 2026 earnings per share have risen from $3.20 to $3.30, while estimates for 2027 earnings have increased from $3.64 to $3.87 during the same time.

Harmony Biosciences’ earnings missed estimates in each of the trailing four quarters, with the average negative surprise being 25.16%.

Over the past 60 days, estimates for Liquidia’s 2026 earnings per share have risen from $2.97 to $3.02, while estimates for 2027 EPS have increased from $4.81 to $5.31 during the same time. LQDA shares have surged 151.7% year to date.

Liquidia’s earnings beat estimates in three of the trailing four quarters and missed in the remaining one, with the average surprise being 54.40%.

Over the past 90 days, Amarin's loss per share estimates for 2026 have narrowed from $6.36 to 65 cents, and the same for 2027 loss has narrowed from $4.64 to 51 cents.

Amarin's earnings beat estimates in three of the trailing four quarters and missed in the remaining one, with the average surprise being 50.02%.

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This article originally published on Zacks Investment Research (zacks.com).

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