Bausch + Lomb Corporation (BLCO) Earnings & Analysis

Latest quarter

Bausch + Lomb reported third-quarter revenue of $1,375 million, up from $1,281 million a year earlier and 0.14% above the consensus. Its filing attributed the increase to higher volumes and pricing across the business, partly offset by currency movements.

The filing shows revenue rose in all three segments. Vision Care sales increased 5% to $774 million, helped by contact lenses and consumer eye care products. Pharmaceuticals revenue rose 11% to $367 million, primarily driven by MIEBO, while Surgical revenue increased 9% to $234 million, primarily on growth in premium intraocular lenses.

Bausch + Lomb reported diluted earnings per share of $0.10, compared with −$0.08 a year earlier. Gross margin rose to 64.7% from 60.2%, and operating margin increased to 11.3% from 7.42%. The filing attributed lower cost of goods sold in part to recoveries of previously paid tariffs and a prior-year inventory charge. Free cash flow was $178.0 million, compared with $63.0 million a year earlier.

Adjusted EPS is the figure the consensus estimates, not the GAAP EPS above.

What management said on the call

Interim CEO Tom Appio said his priorities include improving profitability, meeting the company’s three-year plan targets and advancing its pipeline in dry eye, surgical technologies and contact lenses. He said the company would be disciplined in allocating resources among pipeline programs.

CFO Sam Eldessouky said third-quarter growth came from all three segments. He reported that MIEBO revenue rose 42% to $119 million and that the pharmaceutical dry eye portfolio grew 22% on a constant-currency basis. In consumer eye care, he said positive demand trends from the prior quarter continued and Lumify revenue reached $66 million. Appio said the next generation of Lumify is expected to launch in the first half of 27.

Eldessouky said adjusted gross margin was 64.7%, including a one-time tariff refund of approximately $14 million; excluding that benefit, it was 63.6%. He attributed the margin performance to a mix of higher-margin brands and productivity initiatives. The filing separately attributed part of the quarter’s revenue increase to higher net realized pricing, primarily in Vision Care and Pharmaceuticals.

Asked about the contact lens business, Appio said the daily and reusable lens portfolios offer a base for growth as products roll out internationally. He also discussed Project Halo, which he said was early in development. On surgical equipment, Appio said the company was focusing on placing systems rather than recording equipment revenue, while pursuing premium lenses and consumables.

In response to a question about priorities, Appio said he would examine savings across selling, advertising and administrative functions, alongside capital allocation and debt reduction. Eldessouky said the company would look at its longer-term plan when it provides 2027 guidance.

Guidance

Bausch + Lomb raised its FY2026 revenue outlook to $5.450 billion to $5.550 billion and its adjusted EBITDA outlook, excluding acquired in-process R&D, to $1.090 billion to $1.140 billion.

Eldessouky said the company now expects adjusted gross margin of 62.5% to 63%, compared with approximately 62% previously. He also put the expected adjusted tax rate at approximately 18%, down from 19%, and the currency revenue tailwind at 40 million, down from approximately 45 million.