Valeant Pharmaceuticals’ (VRX) fourth quarter 2012 earnings of $1.21 per share (excluding special items but including stock-based compensation expense) were short of the Zacks Consensus Estimate of $1.25 but were up from the year-ago earnings of 90 cents per share.

Revenues for the quarter were $986 million, up 43% from the year-ago period. The year-over-year improvement in revenues was primarily attributable to higher product sales. Revenues surpassed the Zacks Consensus Estimate of $959 million.

For 2012, revenues came in at $3.55 billion, up 44% year over year and surpassed the Zacks Consensus Estimate of $3.51 billion. Product sales came in at $3.31 billion, an increase of 47% year over year. Product sales were negatively impacted by generic competition ($161 million) and foreign currency movements (over $100 million).

2012 earnings of $4.42 per share (excluding special items but including stock-based compensation expense) were short of the Zacks Consensus Estimate of $4.47 but were up 61.9% year over year.

Quarterly Highlights

Product sales at Valeant Pharma amounted to $947.0 million during the fourth quarter of 2012, up 45% year over year. Strong sales in the US Dermatology and the Emerging Markets segments contributed to the increase.

Organic growth (same store sales) was approximately 7%. On a pro forma basis, (including the impact of acquisitions and foreign exchange) revenues grew 9% from the year-ago quarter.

Research & development (R&D) expenses climbed 20.2% to $20.2 million.

Selling, general & administrative (SG&A) expenses for the fourth quarter of 2012 increased 37.8% to $204.7 million due to a $2.7 million step-up in stock-based compensation expenses related to the acquisitions and $3.7 million loss on the disposal of fixed assets. Excluding these items, SG&A was approximately 20% of revenue.

Guidance

Valeant Pharma reaffirmed its guidance for 2013 provided on Jan 4, 2013. Valeant continues to expect revenues between $4.4 billion and $4.8 billion in 2013, up 30% from 2012, excluding potential acquisitions other than the Natur Produkt acquisition (which was completed in Feb 2013). Earnings per share are projected around $5.45 – $5.75. Valeant expects generics to hit revenues by about $100 million.

The Zacks Consensus Estimate for 2013 hints at earnings of $4.47 per share on revenues of $4.6 billion.

Solodyn (minocycline) revenues are expected in the range of $250 million to $275 million in 2013. Valeant plans to divest several assets generating approximately $40 million to $50 million in annual revenues.