Today’s Economic Shakers

Valeant stock hits lowest level in 6 years following before-the-bell earnings call…

Valeant Pharmaceuticals International Inc. (VRX) took a sharp bearish turn Tuesday morning, falling 28% in pre-market trading as the company severely cut back on its sales and revenue projections for the next year.

The beleaguered company had already suffered an 80% drop in its stock price so far this year, and that was prior to the morning’s sharp sell-off.

Valeant missed on just about every metric there is, and the numbers presented in the earnings call sent investors scurrying for the exists.

The company’s report this morning showed that it lost $1.22 billion, or $3.49 a share during the year’s third quarter. That’s a dramatic shift compared to the same quarter for 2015, when Valeant managed to show a profit of $49.5 million, or 14 cents a share.

Revenue fell as well, dropping to $2.48 billion, an 11% fall-off. The decline in revenue was largely due to a decrease in product sales across all of the company’s businesses.

The loss in revenue left that number beneath expectations of analysts, which had pegged company revenue at $2.49 billion, or $1.73 a share based on a Thomson Reuters survey.

One of the main things that spooked investors the most was likely the company’s surprisingly weak forecast.

Valeant said that it projects adjusted earnings of $9.55 billion to $9.65 billion, or $5.30 to $5.50 a share, in sales for 2016. That’s a significant turnaround from its August guidance, which had pegged earnings to come in between $9.9 billion and $10.1 billion, or $6.60 to $7 a share.

Valeat, once a darling of Wall Street hedge funds, has suffered from a perfect storm of negative events, most of its own making.

It has been at the center of the recent Congressional investigations into excessively high drug prices in the industry, as well as suffering from a rash of accounting issues that has called the veracity of its balance sheet into question.

Additionally, Valeant found itself looking at the possibility of a debt default earlier in the year, which understandably helped to send the stock into a tailspin earlier this year.

Currently, the company’s CEO has been pushing the mantra of a “new Valeant” as it attempts to move away from the fringe of a “creative” business model that had contributed to the stock’s big gains, pushing as high as $119 within the last 52- week period.

Investors don’t seem to be buying the new sell, as the stock fell as low as $14.50 in pre-market trade.

===========================

China data shows October decline in value of both imports and exports…

The latest round of economic data offered up today from China’s Customs Bureau offered up a mixed bag, but overall showed that the country has remained on its current track of weak overall growth.

The data showed a decline in the value of its US dollar-denominated exports in October, falling below analyst forecasts.

Exports were reported to have declined by 7.7%, as compared to the same period from one year earlier, while analysts had projected a drop of 6.0%, leaving a miss of 1.7%.

The miss was considered to be relatively small, particularly compared to the previous month’s report, which showed a decline of 10% within the 12-month time frame leading up September.

The report also showed that China’s currency, the yuan, had fallen nearly 7% against the US dollar. The strength in the dollar has a direct impact on China’s trade balance, as it impacts both imports and exports.

The other side of the trading equation also suffered, though a lesser decline. Chinese imports saw a drop off of 1.4% from October 2015, as measured in US dollar terms.

But the decline was seen as positive news, at least as compared to the1.9% drop seen in September’s report.

Perhaps the key takeaway from the report was the growth in China’s trade surplus to $49.06 billion. That was an increase of more than $7 billion as compared to September’s trade surplus. However, the gain still fell below analyst expectations, which had forecast an increase to $51.7 billion, according to a consensus survey of economists.