Valeant has cut its earnings forecast ? and the stock is up

Canadian drug maker Valeant Pharmaceuticals has cut its earnings forecasts.

The company sees fourth quarter adjusted earnings per share (EPS) coming in at $2.55 to $2.65, compared to previous estimates of $4.00 to $4.20.

The company's adjusted Q4 guidance reflects a "significant disruption" in Valeant's business, the company's CFO Rob Rosiello said during the investor day on Wednesday.

In late October, Citron Research, a short-selling firm led by Andrew Left, issued a report asking if the company was running an Enron-like fraud. The Citron report focused on Valeant's relationship with Philidor, a specialty pharmacy. Citron has accused Valeant of using Philidor to book "phantom sales."

Valeant has denied those allegations and later severed ties with Philidor.

Still, the drama hit the share price hard. Valeant's share price collapsed from a high of more than $260 in August to a low of around $70 in mid-November.

On Tuesday, Valeant said it had reached a distribution deal with Walgreens.

Valeant's stock was last trading up 5.21%, or $5.71, at $115.30 per share in the pre-market.

Here's the full release:

Valeant Pharmaceuticals International, Inc. (NYSE: VRX) (TSX: VRX) today announced updated financial guidance for the fourth quarter and full year 2015 as well as new guidance for full year 2016.

"We are very excited about the strong future given our broad portfolio of brands, our upcoming launch products and our robust R&D pipeline," said J. Michael Pearson, chairman and chief executive officer. "We believe that we are entering a new era of growth and opportunity as we continue to build and grow our businesses around the world and deliver medicines and products at affordable prices that improve the lives of patients."

Full Year 2016 Guidance

• Total Revenue $12.5 - $12.7 billion
• Adjusted EBITDA* $6.9 - $7.1 billion
• Adjusted non-GAAP EPS* $13.25 -$13.75
• Double Digit Same Store Sales Organic Growth - primarily driven through volume
• Expect to reduce debt by ~$2.25 billion, including mandatory payments and maturities
• Expect net leverage ratio to be ~4.0 times pro forma adjusted EBITDA by the end of 2016

Q4 2015 Revised Guidance

• Total Revenues previously $3.25 - $3.45 billion now $2.7 - $2.8 billion
• Adjusted EPS* previously $4.00 - $4.20 now $2.55 -$2.65
• Adjusted Cash Flow from Operations* previously greater than $1.0 billion, now greater than $600 million

Full Year 2015 Revised Guidance

• Total Revenue previously $11.0 - $11.2 billion now $10.4 -$10.5 billion
• Adjusted EPS* previously $11.67 - $11.87 now $10.23 -$10.33
• Adjusted Cash Flow from Operations* previously greater than $3.35 billion, now greater than $2.95 billion

The company is hosting an Investor Day today from 8:00 a.m. to 12:30 p.m. ET to discuss the updated and new financial guidance and provide an overview of select business operations and R&D programs.