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AmerisourceBergen (ABC) Earnings, Revenues Beat in Q3
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AmerisourceBergen Corporation posted earnings (excluding one-time items) of $1.37 per share in the third quarter of fiscal 2016 (ended Jun 30, 2016), beating the Zacks Consensus Estimate of $1.26 and up from $1.20 reported in the year-ago quarter.
Moreover, revenues increased 7.7% to $36.9 billion in the reported quarter and were above the Zacks Consensus Estimate of $36.6 billion.
Quarter in Detail
In the reported quarter, revenues at the Pharmaceutical Distribution segment (including AmerisourceBergen Drug Corp. (ABDC)) and AmerisourceBergen Specialty Group (ABSG)) increased 8% to $35.4 billion. Within the segment, revenues from ABDC were up 6.5% primarily on the back of solid organic sales growth, including sales to Walgreens Boots Alliance (WBA - Free Report) .
The ABSG unit also performed well during the quarter, with revenues surging 20.2% year over year on the back of a strong performance of the oncology business (including an increase in sales to community oncologists), third party logistics business, along with growth in the blood product, vaccine and physician office distribution businesses.
Revenues at the Other segment (AmerisourceBergen Consulting Services (ABCS), World Courier and MWI Veterinary Supply) came in at $1.6 billion, up 2.8%, as growth in MWI Veterinary Supply and World Courier was mostly offset by a decline in ABCS revenues.
Fiscal 2016 Guidance Updated
AmerisourceBergen continues to expect fourth-quarter gross profit to be dented by headwinds such as an increase in the rate of generic deflation and a lower contribution from new generic launches. The company now expects earnings per share in the range of in the range of $5.52–$5.57, compared with the previous projection of $5.44 to $5.54. The pre-earnings Zacks Consensus Estimate of $5.50 is near the low end of the company’s updated guidance.
The company also provided its guidance for fiscal 2017. It expects headwinds impacting fiscal 2016 results to continue into fiscal 2017, including a rate of deflation in generic products in the high single-digit range. Earnings in fiscal 2017 are expected to grow in the range of 4–6%.
AmerisourceBergen reported strong results for the third quarter as both earnings and sales topped the respective estimates even amid challenging business conditions. The acquisitions of MWI Veterinary Supply and PharMEDium continue to boost the company’s performance. Headwinds such as an increase in the rate of generic deflation and lower contribution from new generic launches will continue to dampen gross profit in the fourth quarter and fiscal 2017.
AmerisourceBergen currently carries a Zacks Rank #2 (Buy). A couple of other favorably placed stocks in the healthcare sector include Impax Laboratories Inc. and Supernus Pharmaceuticals, Inc. (SUPN - Free Report) . Both the stocks carry the same rank as AmerisourceBergen.
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AmerisourceBergen (ABC) Earnings, Revenues Beat in Q3
AmerisourceBergen Corporation posted earnings (excluding one-time items) of $1.37 per share in the third quarter of fiscal 2016 (ended Jun 30, 2016), beating the Zacks Consensus Estimate of $1.26 and up from $1.20 reported in the year-ago quarter.
Moreover, revenues increased 7.7% to $36.9 billion in the reported quarter and were above the Zacks Consensus Estimate of $36.6 billion.
Quarter in Detail
In the reported quarter, revenues at the Pharmaceutical Distribution segment (including AmerisourceBergen Drug Corp. (ABDC)) and AmerisourceBergen Specialty Group (ABSG)) increased 8% to $35.4 billion. Within the segment, revenues from ABDC were up 6.5% primarily on the back of solid organic sales growth, including sales to Walgreens Boots Alliance (WBA - Free Report) .
The ABSG unit also performed well during the quarter, with revenues surging 20.2% year over year on the back of a strong performance of the oncology business (including an increase in sales to community oncologists), third party logistics business, along with growth in the blood product, vaccine and physician office distribution businesses.
Revenues at the Other segment (AmerisourceBergen Consulting Services (ABCS), World Courier and MWI Veterinary Supply) came in at $1.6 billion, up 2.8%, as growth in MWI Veterinary Supply and World Courier was mostly offset by a decline in ABCS revenues.
Fiscal 2016 Guidance Updated
AmerisourceBergen continues to expect fourth-quarter gross profit to be dented by headwinds such as an increase in the rate of generic deflation and a lower contribution from new generic launches. The company now expects earnings per share in the range of in the range of $5.52–$5.57, compared with the previous projection of $5.44 to $5.54. The pre-earnings Zacks Consensus Estimate of $5.50 is near the low end of the company’s updated guidance.
The company also provided its guidance for fiscal 2017. It expects headwinds impacting fiscal 2016 results to continue into fiscal 2017, including a rate of deflation in generic products in the high single-digit range. Earnings in fiscal 2017 are expected to grow in the range of 4–6%.
AMERISOURCEBRGN Price and EPS Surprise
AMERISOURCEBRGN Price and EPS Surprise | AMERISOURCEBRGN Quote
Our Take
AmerisourceBergen reported strong results for the third quarter as both earnings and sales topped the respective estimates even amid challenging business conditions. The acquisitions of MWI Veterinary Supply and PharMEDium continue to boost the company’s performance. Headwinds such as an increase in the rate of generic deflation and lower contribution from new generic launches will continue to dampen gross profit in the fourth quarter and fiscal 2017.
AmerisourceBergen currently carries a Zacks Rank #2 (Buy). A couple of other favorably placed stocks in the healthcare sector include Impax Laboratories Inc. and Supernus Pharmaceuticals, Inc. (SUPN - Free Report) . Both the stocks carry the same rank as AmerisourceBergen.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>