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AmerisourceBergen (ABC) to Post Q2 Earnings: What's in Store?

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AmerisourceBergen Corporation (ABC - Free Report) is scheduled to release second-quarter fiscal 2022 results on May 4, before the opening bell.

In the last reported quarter, the company delivered a negative earnings surprise of 0.4%. Its earnings beat estimates in three of the trailing four quarters and missed once, the average surprise being 2.3%.

Q2 Estimates

The Zacks Consensus Estimate for second-quarter fiscal 2022 revenues is pegged at $57.21 billion, indicating an improvement of 16.4% from the prior-year quarter. The consensus mark for earnings stands at $2.99, suggesting growth of 18.2% from the year-ago reported figure.

Factors to Note

Sustained growth in specialty product sales, including COVID-19 treatments and overall market growth, at this U.S. Healthcare Solutions segment may have favored the fiscal second-quarter performance. With respect to this segment, revenues are expected in the band of $207 billion to $212 billion in fiscal 2022, representing growth of 2-5%. Consequently, this may get reflected in the fiscal second-quarter results.

Solid organic growth rates in the U.S. pharmaceutical market and population demographics might have contributed to the to-be-reported quarter’s performance.

In fiscal 2022, operating income at this segment is anticipated between $2.38 billion and $2.45 billion, reflecting growth of 5-9%. This, in turn, is likely to get reflected in the fiscal second-quarter results.

Apart from this, the World Courier unit is likely to have exhibited solid performance in the fiscal second quarter. In fact, World Courier’s impressive track record as an international leader in specialty logistics has enabled AmerisourceBergen to lend support to customers globally despite a challenging COVID-19 induced environment and additional operational challenges. Going forward, World Courier will continue to design and deploy patient-centric and forward-thinking transport services in new areas like in-home clinical trials, making treatments in patients’ home possible in virtually every therapeutic area.

Per management, AmerisourceBergen continues to play a crucial role as the distributor of antiviral and antibody therapies used to treat COVID-19.

These aforementioned trends are likely to have sustained in the fiscal second quarter as well.

Per the fiscal 2022 guidance, operating income at the International Healthcare solutions segment is estimated to improve in the range of $685 million to $715 million. This, in turn, is likely to get reflected in the fiscal second-quarter results.

However, higher adjusted operating expenses may have weighed on the company’s to-be-reported quarter performance.

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 -2.81%. 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 #4 (Sell).

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 +0.36% and a Zacks Rank of 3. You can see the complete list of today's Zacks #1 Rank stocks here.

Zimmer Biomet's long-term earnings growth rate is estimated at 5.8%. The company's earnings yield of 5.2% compares favorably with the industry's 0.9%.

Haemonetics Corporation (HAE - Free Report) has an Earnings ESP of +0.84% and a Zacks Rank of 3.

Haemonetics' long-term earnings growth rate is estimated at 10%. The company's earnings yield of 5.1% compares favorably with the industry's 0.9%.

DexCom, Inc. (DXCM - Free Report) has an Earnings ESP of +9.06% and a Zacks Rank of 3.

DexCom's long-term earnings growth rate is estimated at 17.6%. The company's earnings yield of 0.8% compares favorably with the industry's (7%).

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.