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AmerisourceBergen (ABC) to Post Q4 Earnings: What's in Store?

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AmerisourceBergen Corporation (ABC - Free Report) is scheduled to release fourth-quarter fiscal 2021 results on Nov 4, before the opening bell.

In the last reported quarter, the company delivered an earnings surprise of 7.5%. Its earnings beat estimates in each of the trailing four quarters, the average surprise being 5.4%.

Q4 Estimates

The Zacks Consensus Estimate for fourth-quarter fiscal 2021 revenues is pegged at $56.69 billion, indicating an improvement of 15.1% from the prior-year quarter. The consensus mark for earnings stands at $2.36, suggesting growth of 24.9% from the year-ago reported figure.

Pharmaceutical Distribution Unit: A Key Factor

Sustained growth in specialty product sales, including COVID-19 treatments coupled with overall market growth, at this segment may have benefited the fiscal fourth-quarter performance. This segment serves healthcare providers in the pharmaceutical supply channel. Solid organic growth rates in the U.S. pharmaceutical market and population demographics 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 $50.29 billion, suggesting growth of 6.3% from the year-ago reported figure.

Moreover, operating income at this segment is anticipated to improve in the low-double-digit percent range in fiscal 2021. This, in turn, is likely to get reflected in the fiscal fourth-quarter results.

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 fiscal third quarter, business continued to provide high-specialty logistics worldwide despite the challenging global logistics environment, while boosting innovation with clinical trials in at-home settings. This trend is likely to have continued in the fiscal fourth quarter as well. 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 favored the fiscal fourth-quarter performance, backed by growth across its three operating units — AmerisourceBergen Consulting Services, MWI Veterinary Supply and World Courier segments.

However, adjusted operating expenses in fiscal 2021 are estimated to be around $3.9 billion (up from the previously guided projection of the same increasing in the high-single digit percent range). Consequently, the fiscal fourth-quarter results are likely to reflect this impact.

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 -0.78%. 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.

Insulet Corporation (PODD - Free Report) has an Earnings ESP of +15.79% and a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Canopy Growth Corporation (CGC - Free Report) has an Earnings ESP of +26.83% and a Zacks Rank of 3.

Cardiovascular Systems, Inc. (CSII - Free Report) has an Earnings ESP of +50.82% and a Zacks Rank of 3.