Canada's Valeant Pharmaceuticals International Inc (VRX.TO) raised its 2017 earnings forecast and reported its first profit in six quarters, helped by a one-time tax gain, and its U.S. shares jumped nearly 21 per cent.

The maker of Bausch + Lomb contact lenses and irritable bowel treatment Xifaxan is trying to regain investor confidence after investigations into its drug pricing and other business practices, such as its use of a specialty pharmacy, by multiple U.S. government agencies.

Laval, Quebec-based Valeant said it expected 2017 earnings before interest, tax, depreciation and amortization of US$3.60 billion to US$3.75 billion, excluding special items. It previously forecast US$3.55 billion to US$3.70 billion.

The outlook cheered investors who may have expected a reduction, said BTIG analyst Tim Chiang.

"The market was very fearful that something else was going to go wrong," Chiang said. "Maybe management is getting their hands around the situation. Still, they have this uphill climb."

The results came after billionaire investor William Ackman sold his entire stake in Valeant in March at a loss of more than US$3 billion.

Valeant is focusing on its dermatology, eyecare and gastrointestinal units while selling other assets to repay heavy debt.

Despite challenges, the company is "the turnaround opportunity of a lifetime" as it fixes its balance sheet, Chief Executive Officer Joe Papa told analysts.

Valeant's shares were up 20.6 per cent at US$11.71 in New York. At Monday's close, they had fallen 70 per cent since August.

The drugmaker reduced its long-term debt by US$1.3 billion in the first quarter, leaving it at US$28.54 billion on March 31.

Refinancing has created a more comfortable repayment schedule, Chief Financial Officer Paul Herendeen said.

Net income was US$628 million, or US$1.79 per share, in the quarter, compared with a year-earlier loss of US$374 million, or US$1.08 per share.

The results included a one-time income tax benefit of $908 million from internal restructuring.

On a per-share basis, Valeant's earnings were 78 cents, excluding items, below the analysts' average estimate of 82 cents, according to Thomson Reuters I/B//E/S.

Revenue fell to US$2.11 billion from US$2.37 billion, missing the average estimate of US$2.18 billion.

Revenue at Valeant's branded Rx unit fell nine per cent to US$604 million. The company said a decrease in volume offset higher prices.

"The focus point has not been volume but to stabilize average selling price," said Scott Hirsch, senior vice president of business strategy and communication.