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AmerisourceBergen (ABC) to Post Q4 Earnings: What's in Store?
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AmerisourceBergen Corporation is scheduled to release fourth-quarter fiscal 2020 results on Nov 5, before the opening bell.
In the last reported quarter, the company delivered an earnings surprise of 17.1%. Its earnings beat estimates in each of the trailing four quarters, the average surprise being 7.4%.
Q4 Estimates
The Zacks Consensus Estimate for fourth-quarter fiscal 2020 revenues is pegged at $48.08 billion, indicating an improvement of 5.4% from the prior-year quarter. The consensus mark for earnings stands at $1.87, suggesting growth of 16.2% from the year-ago reported figure.
Pharmaceutical Distribution Unit Holds Key
Sustained growth in specialty product sales and expanding customer base at this segment are likely to have benefited the fiscal fourth-quarter performance. Notably, this segment serves healthcare providers in the pharmaceutical supply channel. Solid organic growth rates in the U.S. pharmaceutical market, population demographics and improving patient access to medical care might get reflected in the to-be-reported quarter’s results.
In fact, the Zacks Consensus Estimate for fiscal fourth-quarter revenues for this segment is pegged at $46.64 billion, suggesting growth of 6.3% from the year-ago reported figure.
AmerisourceBergen Corporation Price and EPS Surprise
Moreover, operating income at this segment is expected to improve in the mid-to-high-single digit percent range in fiscal 2020.
Other Factors to Note
World Courier unit
The World Courier unit, in particular, is likely to have contributed to the Other segment’s performance in the fiscal fourth quarter. During the fiscal third quarter, the business was able to provide more services and managed complexity despite the challenging environment and the trend is likely to continue in the to-be-reported quarter. Enhancing customer experience through new offerings, technology improvements and delivery of high tax logistics services might have contributed to the fiscal fourth-quarter performance.
The company’s to-be-reported quarter’s results are likely to reflect solid demand for its high touch global specialty logistics.
Other Segment
This segment comprises Global Commercialization Services and Animal Health, and includes World Courier, AmerisourceBergen Consulting and MWI. The segment may have benefited the fiscal fourth-quarter performance, courtesy of growth in both AmerisourceBergen Consulting Services and World Courier segments.
Apart from this, the company is likely to have gained from generics growth in the to-be-reported quarter. During the fiscal third quarter of 2020, AmerisourceBergen introduced two new offerings at its MWI Animal Health business, which have been developed to help veterinarians manage the financial impact of COVID-19. The new offerings enable practices to offer flexible financing solutions for clients, thereby lowering the financial burden of both routine and emergency pet care. The offerings also help the practices in achieving sustained revenue, long-term client engagement and improved patient outcomes. Hence, new product launches like this one may have contributed to overall results.
However, stiff competition, as the company operates in a highly competitive pharmaceutical distribution and related health care services market, might have weighed on the fiscal fourth-quarter performance.
Further, adjusted operating expenses in fiscal 2020 are estimated to increase in the low-single digit percent range.
Moreover, it is important to note here that although the COVID-19 pandemic had a greater impact on the first half of the year, the reopening of economy led to resumption of dental practices since July. Consequently, the company’s fiscal fourth-quarter results are likely to reflect the impact of the same.
What Our Quantitative Model Suggests
Per our proven model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. This is not the case here as you will see.
Earnings ESP: AmerisourceBergen has an Earnings ESP of -0.36%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: It carries a Zacks Rank #3.
Stocks Worth a Look
Here are some medical stocks worth considering as these have the right combination of elements to post an earnings beat this quarter.
GW Pharmaceuticals plc has an Earnings ESP of +9.65% and a Zacks Rank of 3.
Cardinal Health, Inc. (CAH - Free Report) has an Earnings ESP of +3.40% and a Zacks Rank of 2.
The Hottest Tech Mega-Trend of All
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
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AmerisourceBergen (ABC) to Post Q4 Earnings: What's in Store?
AmerisourceBergen Corporation is scheduled to release fourth-quarter fiscal 2020 results on Nov 5, before the opening bell.
In the last reported quarter, the company delivered an earnings surprise of 17.1%. Its earnings beat estimates in each of the trailing four quarters, the average surprise being 7.4%.
Q4 Estimates
The Zacks Consensus Estimate for fourth-quarter fiscal 2020 revenues is pegged at $48.08 billion, indicating an improvement of 5.4% from the prior-year quarter. The consensus mark for earnings stands at $1.87, suggesting growth of 16.2% from the year-ago reported figure.
Pharmaceutical Distribution Unit Holds Key
Sustained growth in specialty product sales and expanding customer base at this segment are likely to have benefited the fiscal fourth-quarter performance. Notably, this segment serves healthcare providers in the pharmaceutical supply channel. Solid organic growth rates in the U.S. pharmaceutical market, population demographics and improving patient access to medical care might get reflected in the to-be-reported quarter’s results.
In fact, the Zacks Consensus Estimate for fiscal fourth-quarter revenues for this segment is pegged at $46.64 billion, suggesting growth of 6.3% from the year-ago reported figure.
AmerisourceBergen Corporation Price and EPS Surprise
AmerisourceBergen Corporation price-eps-surprise | AmerisourceBergen Corporation Quote
Moreover, operating income at this segment is expected to improve in the mid-to-high-single digit percent range in fiscal 2020.
Other Factors to Note
World Courier unit
The World Courier unit, in particular, is likely to have contributed to the Other segment’s performance in the fiscal fourth quarter. During the fiscal third quarter, the business was able to provide more services and managed complexity despite the challenging environment and the trend is likely to continue in the to-be-reported quarter. Enhancing customer experience through new offerings, technology improvements and delivery of high tax logistics services might have contributed to the fiscal fourth-quarter performance.
The company’s to-be-reported quarter’s results are likely to reflect solid demand for its high touch global specialty logistics.
Other Segment
This segment comprises Global Commercialization Services and Animal Health, and includes World Courier, AmerisourceBergen Consulting and MWI. The segment may have benefited the fiscal fourth-quarter performance, courtesy of growth in both AmerisourceBergen Consulting Services and World Courier segments.
Apart from this, the company is likely to have gained from generics growth in the to-be-reported quarter. During the fiscal third quarter of 2020, AmerisourceBergen introduced two new offerings at its MWI Animal Health business, which have been developed to help veterinarians manage the financial impact of COVID-19. The new offerings enable practices to offer flexible financing solutions for clients, thereby lowering the financial burden of both routine and emergency pet care. The offerings also help the practices in achieving sustained revenue, long-term client engagement and improved patient outcomes. Hence, new product launches like this one may have contributed to overall results.
However, stiff competition, as the company operates in a highly competitive pharmaceutical distribution and related health care services market, might have weighed on the fiscal fourth-quarter performance.
Further, adjusted operating expenses in fiscal 2020 are estimated to increase in the low-single digit percent range.
Moreover, it is important to note here that although the COVID-19 pandemic had a greater impact on the first half of the year, the reopening of economy led to resumption of dental practices since July. Consequently, the company’s fiscal fourth-quarter results are likely to reflect the impact of the same.
What Our Quantitative Model Suggests
Per our proven model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. This is not the case here as you will see.
Earnings ESP: AmerisourceBergen has an Earnings ESP of -0.36%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: It carries a Zacks Rank #3.
Stocks Worth a Look
Here are some medical stocks worth considering as these have the right combination of elements to post an earnings beat this quarter.
Zimmer Biomet Holdings, Inc. (ZBH - Free Report) has an Earnings ESP of +4.10% and a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.
GW Pharmaceuticals plc has an Earnings ESP of +9.65% and a Zacks Rank of 3.
Cardinal Health, Inc. (CAH - Free Report) has an Earnings ESP of +3.40% and a Zacks Rank of 2.
The Hottest Tech Mega-Trend of All
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>