Back to top

Image: Bigstock

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

Read MoreHide Full Article

AmerisourceBergen Corporation (ABC - Free Report) is scheduled to release fourth-quarter fiscal 2022 results on Nov 3, before the opening bell.

In the last reported quarter, the company delivered an earnings surprise of 1.95%. Its earnings beat estimates in three of the trailing four quarters and missed once, the average surprise being 2.63%.

Q4 Estimates

The Zacks Consensus Estimate for fourth-quarter fiscal 2022 revenues is pegged at $60.51 billion, indicating an improvement of 2.7% from the prior-year quarter. The consensus mark for earnings stands at $2.58, suggesting growth of 7.95% from the year-ago reported figure.

Factors to Note

Sustained growth in specialty product sales coupled with overall market growth at this U.S. Healthcare Solutions segment may have favored the fiscal fourth-quarter performance. The commercial COVID-19 treatments recorded lower sales in the third quarter, a trend that is likely to have continued in the soon-to-be-reported quarter. With respect to this segment, revenues are expected in the band of $207 billion to $212 billion in fiscal 2022, implying growth of 2-5%. Consequently, this may get reflected in the fiscal fourth-quarter results. Our model suggests fourth-quarter revenues for this segment to be $53.9 billion.

In fiscal 2022, operating income at this segment is anticipated between $2.44 billion and $2.48 billion, indicating growth of 8-10%. This, in turn, is likely to get reflected in the fiscal fourth-quarter results. Our model predicts the segment’s adjusted operating income to be $592.5 million for the fourth quarter.

Apart from this, the International Healthcare solutions segment’s World Courier unit is likely to have exhibited solid performance in the fiscal fourth 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-induced environment and additional operational challenges. Moreover, Alliance Healthcare’s products are likely to have driven the top line in the fourth quarter. The company guided full-year revenues for the segment between $26 billion and $27 billion. Our model suggests fourth-quarter revenues for this segment to be $6.9 billion.

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 fourth-quarter results. Our model predicts the segment’s adjusted operating income to be $177.1 million for the fourth quarter.

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. That is not the case here as you will see.

Earnings ESP: AmerisourceBergen has an Earnings ESP of -0.25%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: The company carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Stocks to Consider

Here are a few medical stocks worth considering as these have the right combination of elements to beat on earnings this reporting cycle:

McKesson (MCK - Free Report) has an Earnings ESP of +0.27% and is a Zacks #2 Ranked stock. MCK has an earnings yield of 6.6%, which compares favorably with the industry’s yield of 5.2%.

McKesson’s earnings surpassed estimates in three of the trailing four quarters and missed once, with the average surprise being 13.00%.

Elanco Animal Health (ELAN - Free Report) has an Earnings ESP of +0.79% and a Zacks Rank of 3. ELAN has an estimated long-term growth rate of 9.1%.

Elanco Animal Health’s earnings surpassed estimates in all the trailing four quarters, with the average surprise being 19.15%.

Thermo Fisher Scientific (TMO - Free Report) has an Earnings ESP of +2.63% and a Zacks Rank of 3 at present. TMO has an earnings yield of 4.62% against a negative yield for the industry.

Thermo Fisher Scientific’s earnings surpassed estimates in all the trailing four quarters, with the average surprise being 19.53%.

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

Published in