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AmerisourceBergen (ABC) Q2 Earnings: Will it Disappoint?
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AmerisourceBergen Corp. is set to report second-quarter fiscal 2017 results on May 4, before the opening bell.
AmerisourceBergen’s track record has been quite impressive, with the company comfortably beating estimates in each of the trailing four trailing quarters. In the last reported quarter, it delivered a positive earnings surprise of 9.68%, bringing the four-quarter average to 7.66%. Let’s see how things are shaping up prior to this release.
Factors at Play
AmerisourceBergen’s pharmaceutical distribution segment continues to face headwinds in the form of contract renewals and lower generic inflation. The AmerisourceBergen Drug Corporation (“ABDC”) business is also being hurt by several factors, including accelerating deflation of generic drugs and lower contribution from generic launches.
Although generic inflation has been nominal, the rate of deflation is rising gradually. These factors, combined with an anticipated shift in product mix toward lower-margin and higher-priced specialty and branded drugs, and lack of generic inflation will adversely impact the bottom line.
However, the company renewed its relationship with the largest health systems’ customer and has been making persistent efforts to address the headwinds in the ABDC segment. This can boost the top line to some extent in the fiscal second quarter.
Over the past three months, AmerisourceBergen lost almost 6.30%, which is higher than the Zacks categorized Medical/Dental Supplies sub-industry’s gain of roughly 6.55%. Also, AmerisourceBergen is apprehensive about its earnings and revenue growth expectations for fiscal 2017 due to the uncertainty surrounding drug pricing trends. The company currently expects fiscal 2017 revenue growth in the range of 6.5% to 8%. The company expects adjusted diluted earnings per share for fiscal 2017 in the range of $5.72 to $5.92.
AmerisourceBergen Corporation (Holding Co) Price and EPS Surprise
Our quantitative model doesn’t point to an earnings beat this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here as you will see below.
Zacks ESP: The Earnings ESP for AmerisourceBergen is -1.75%. This is because the Most Accurate estimate stands at $1.68 and the Zacks Consensus Estimate stand at $1.71. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: AmerisourceBergen carries a Zacks Rank #3 which increases the predictive power of ESP. However, the company’s ESP of -1.75% makes surprise prediction difficult.
We caution against stocks with a Zacks Ranks #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Here are some companies you may want to consider as our model shows that they have the right combination of elements to post an earnings beat this quarter:
Best Buy Co. Inc. (BBY - Free Report) has an Earnings ESP of +12.50% and a Zacks Rank #3. On average, the stock delivered a positive surprise of almost 27.70% in the last four quarters.
Raymond James Financial, Inc. (RJF - Free Report) has an Earnings ESP of +3.45% and a Zacks Rank #1. The stock delivered a positive surprise of almost 14.4% in the last four trailing quarters.
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AmerisourceBergen (ABC) Q2 Earnings: Will it Disappoint?
AmerisourceBergen Corp. is set to report second-quarter fiscal 2017 results on May 4, before the opening bell.
AmerisourceBergen’s track record has been quite impressive, with the company comfortably beating estimates in each of the trailing four trailing quarters. In the last reported quarter, it delivered a positive earnings surprise of 9.68%, bringing the four-quarter average to 7.66%. Let’s see how things are shaping up prior to this release.
Factors at Play
AmerisourceBergen’s pharmaceutical distribution segment continues to face headwinds in the form of contract renewals and lower generic inflation. The AmerisourceBergen Drug Corporation (“ABDC”) business is also being hurt by several factors, including accelerating deflation of generic drugs and lower contribution from generic launches.
Although generic inflation has been nominal, the rate of deflation is rising gradually. These factors, combined with an anticipated shift in product mix toward lower-margin and higher-priced specialty and branded drugs, and lack of generic inflation will adversely impact the bottom line.
However, the company renewed its relationship with the largest health systems’ customer and has been making persistent efforts to address the headwinds in the ABDC segment. This can boost the top line to some extent in the fiscal second quarter.
Over the past three months, AmerisourceBergen lost almost 6.30%, which is higher than the Zacks categorized Medical/Dental Supplies sub-industry’s gain of roughly 6.55%. Also, AmerisourceBergen is apprehensive about its earnings and revenue growth expectations for fiscal 2017 due to the uncertainty surrounding drug pricing trends. The company currently expects fiscal 2017 revenue growth in the range of 6.5% to 8%. The company expects adjusted diluted earnings per share for fiscal 2017 in the range of $5.72 to $5.92.
AmerisourceBergen Corporation (Holding Co) Price and EPS Surprise
AmerisourceBergen Corporation (Holding Co) Price and EPS Surprise | AmerisourceBergen Corporation (Holding Co) Quote
Earnings Whispers
Our quantitative model doesn’t point to an earnings beat this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here as you will see below.
Zacks ESP: The Earnings ESP for AmerisourceBergen is -1.75%. This is because the Most Accurate estimate stands at $1.68 and the Zacks Consensus Estimate stand at $1.71. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: AmerisourceBergen carries a Zacks Rank #3 which increases the predictive power of ESP. However, the company’s ESP of -1.75% makes surprise prediction difficult.
We caution against stocks with a Zacks Ranks #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Here are some companies you may want to consider as our model shows that they have the right combination of elements to post an earnings beat this quarter:
Best Buy Co. Inc. (BBY - Free Report) has an Earnings ESP of +12.50% and a Zacks Rank #3. On average, the stock delivered a positive surprise of almost 27.70% in the last four quarters.
Global Partners LP (GLP - Free Report) delivered a positive surprise of almost 96.55% in the trailing four quarters. It has an Earnings ESP of +233.33% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Raymond James Financial, Inc. (RJF - Free Report) has an Earnings ESP of +3.45% and a Zacks Rank #1. The stock delivered a positive surprise of almost 14.4% in the last four trailing quarters.
5 Trades Could Profit ""Big-League"" from Trump Policies
If the stocks above spark your interest, wait until you look into companies primed to make substantial gains from Washington's changing course.
Today Zacks reveals 5 tickers that could benefit from new trends like streamlined drug approvals, tariffs, lower taxes, higher interest rates, and spending surges in defense and infrastructure. See these buy recommendations now >>