AmerisourceBergen Corporation posted adjusted earnings of $1.43 per share in the third quarter of fiscal 2017, beating the Zacks Consensus Estimate of $1.37 and increasing 4.4% on a year-over-year basis. The upside was primarily driven by strong growth in its Consulting Services, MWI Animal Health and World Courier businesses.
Revenues improved almost 4.9% to $38.7 billion in the reported quarter. However, reported revenues were lower than the Zacks Consensus Estimate of $39.3 billion.
Revenue Segments
Pharmaceutical Distribution segment: In the reported quarter, revenues at the segment increased 4.7% to $37.0 billion. Within the segment, AmerisourceBergen Drug Corp. revenues were up 4.5%, primarily on the back of solid organic sales growth.
The AmerisourceBergen Specialty Group unit in the segment performed impressively during the quarter, with revenues rising 10.3% year over year. The increase can be attributed to strong oncology product sales and solid performance by the third-party logistics business.
Other segment: This segment includes AmerisourceBergen Consulting Services (ABCS), World Courier and MWI Veterinary Supply. Revenues at the segment came in at $1.7 billion, up 10.6% on a year-over-year basis.
Operating Performance
Operating expenses, as a percentage of revenues, in the third quarter were 2.35% compared with 1.57% in the year-ago quarter.
Operating income, as a percentage of revenue, contracted 99 basis points (bps) to 0.44% in the quarter under review.
As a percentage of revenues, gross profit declined 21 bps in the reported quarter on a year-over-year basis to 2.79%.
Guidance
AmerisourceBergen expects fiscal 2017 revenue growth in the range of approximately 5%, significantly lower than the previously provided band of 5.5% to 6.5%.
The company expects adjusted diluted earnings per share for fiscal 2017 in the band of $5.82 to $5.92, up from the previously provided $5.77 to $5.92.
The company expects brand drug inflation in the range of 7% to 9%.
Zacks Rank & Stocks to Consider
AmerisourceBergen has a Zacks Rank #4 (Sell).
Better-ranked medical stocks include Edwards Lifesciences Corporation (EW - Free Report) , Abiomed Inc. and Fresenius Medical Care Corporation (FMS - Free Report) . Fresenius Medical Care and Edwards Lifesciences sport a Zacks Rank #1 (Strong Buy), while Abiomed has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Edwards Lifesciences has a long-term expected earnings growth rate of 15.2%. The stock has a one-year return of 1.5%.
Abiomed delivered a strong return of 23.4% over the last one year. The stock has a long-term expected earnings growth rate of 30.5%.
Fresenius Medical Care represents a return of 2.5% over the last one year. The company delivered a solid earnings surprise of 20.5% in the last reported quarter.
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It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
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AmerisourceBergen Corporation posted adjusted earnings of $1.43 per share in the third quarter of fiscal 2017, beating the Zacks Consensus Estimate of $1.37 and increasing 4.4% on a year-over-year basis. The upside was primarily driven by strong growth in its Consulting Services, MWI Animal Health and World Courier businesses.
Revenues improved almost 4.9% to $38.7 billion in the reported quarter. However, reported revenues were lower than the Zacks Consensus Estimate of $39.3 billion.
Revenue Segments
Pharmaceutical Distribution segment: In the reported quarter, revenues at the segment increased 4.7% to $37.0 billion. Within the segment, AmerisourceBergen Drug Corp. revenues were up 4.5%, primarily on the back of solid organic sales growth.
The AmerisourceBergen Specialty Group unit in the segment performed impressively during the quarter, with revenues rising 10.3% year over year. The increase can be attributed to strong oncology product sales and solid performance by the third-party logistics business.
Other segment: This segment includes AmerisourceBergen Consulting Services (ABCS), World Courier and MWI Veterinary Supply. Revenues at the segment came in at $1.7 billion, up 10.6% on a year-over-year basis.
Operating Performance
Operating expenses, as a percentage of revenues, in the third quarter were 2.35% compared with 1.57% in the year-ago quarter.
Operating income, as a percentage of revenue, contracted 99 basis points (bps) to 0.44% in the quarter under review.
As a percentage of revenues, gross profit declined 21 bps in the reported quarter on a year-over-year basis to 2.79%.
Guidance
AmerisourceBergen expects fiscal 2017 revenue growth in the range of approximately 5%, significantly lower than the previously provided band of 5.5% to 6.5%.
The company expects adjusted diluted earnings per share for fiscal 2017 in the band of $5.82 to $5.92, up from the previously provided $5.77 to $5.92.
The company expects brand drug inflation in the range of 7% to 9%.
Zacks Rank & Stocks to Consider
AmerisourceBergen has a Zacks Rank #4 (Sell).
Better-ranked medical stocks include Edwards Lifesciences Corporation (EW - Free Report) , Abiomed Inc. and Fresenius Medical Care Corporation (FMS - Free Report) . Fresenius Medical Care and Edwards Lifesciences sport a Zacks Rank #1 (Strong Buy), while Abiomed has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Edwards Lifesciences has a long-term expected earnings growth rate of 15.2%. The stock has a one-year return of 1.5%.
Abiomed delivered a strong return of 23.4% over the last one year. The stock has a long-term expected earnings growth rate of 30.5%.
Fresenius Medical Care represents a return of 2.5% over the last one year. The company delivered a solid earnings surprise of 20.5% in the last reported quarter.
More Stock News: Tech Opportunity Worth $386 Billion in 2017
From driverless cars to artificial intelligence, we've seen an unsurpassed growth of high-tech products in recent months. Yesterday's science-fiction is becoming today's reality. Despite all the innovation, there is a single component no tech company can survive without. Demand for this critical device will reach $387 billion this year alone, and it's likely to grow even faster in the future.
Zacks has released a brand-new Special Report to help you take advantage of this exciting investment opportunity. Most importantly, it reveals 4 stocks with massive profit potential. See these stocks now>>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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