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AmerisourceBergen (ABC) Q4 Earnings & Revenues Top Estimates
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AmerisourceBergen Corporation reported fourth-quarter fiscal 2022 adjusted earnings per share (EPS) of $2.60, which beat the Zacks Consensus Estimate of $2.58 by 0.8%. The bottom line improved 8.8% year over year.
GAAP EPS in the quarter was $1.40, down 32.7% from the year-ago period.
Revenue Details
Revenues increased 3.8% to $61.2 billion in the reported quarter. The top line beat the Zacks Consensus Estimate by 1.5%.
Fiscal 2022 Results
AmerisourceBergen reported full-year revenues of $238.59 billion, up 11.5% year over year. Adjusted EPS grew 19.1% to $11.03.
Segment Realignment Update
It is worth mentioning that AmerisourceBergen made a strategic evaluation of its reporting structure in order to represent its expanded international presence, courtesy of the June 2021 buyout of Alliance Healthcare. Consequently, starting from the second quarter of fiscal 2022, the company realigned its reporting structure under two reportable segments — U.S. Healthcare Solutions and International Healthcare Solutions.
Segmental Analysis
U.S. Healthcare Solutions
Revenues at this segment totaled $54.8 billion, reflecting an increase of 4.7% on a year-over-year basis on the back of an increase in specialty product sales coupled with overall market growth. Lower revenues from commercial COVID-19 treatments partially offset the upside.
Segmental operating income was $578.4 million, up 14% year over year. Higher gross profit (which included fees earned associated with the distribution of government-owned COVID-19 treatments and gross profit on sales to specialty physician practices) contributed to the upside.
AmerisourceBergen Corporation Price, Consensus and EPS Surprise
This segment includes Alliance Healthcare, World Courier, Innomar, Profarma and Profarma Specialty.
Revenues at this segment were $6.4 billion, down 2.7% year over year.
Operating income in the segment was $163.1 million in the quarter, down 12.6% year over year.
Margin Analysis
In the fiscal fourth quarter, AmerisourceBergen reported an adjusted gross profit of $2.1 billion, up 4.8% on a year-over-year basis. As a percentage of revenues, the adjusted gross margin was 3.4% in the quarter, up 4 basis points (bps).
The company reported an adjusted operating income of $741.5 million, up 6.8% year over year. As a percentage of revenues, the adjusted operating margin was 1.2% in the quarter, which expanded 3 bps from the year-ago quarter.
Financial Position
The company exited the quarter with cash and cash equivalents worth $3.39 billion, compared with $3.03 billion in the third quater.
Cumulative net cash used in operating activities at the end of the fiscal fourth quarter totaled $2.7 billion compared with $2.67 billion in the prior-year quarter.
Dividend Update
During the quarter, AmerisourceBergen's board of directors declared a quarterly dividend of 48.5 cents per share, to be paid out on Nov 28, to shareholders at the close of business on Nov 14, 2022.
Fiscal 2023 Guidance
AmerisourceBergen issued its fiscal 2023 outlook, reflecting continued growth in revenues and earnings.
Adjusted EPS is estimated to be $11.30-$11.60 for fiscal 2023, reflecting growth of 2-5% over fiscal 2022. The Zacks Consensus Estimate currently stands at $11.47.
The company estimates revenue growth in fiscal 2023 to be 5-7%.
With respect to the U.S. Healthcare Solutions segment, revenues are expected to grow 6-8%. Revenues at the International Healthcare solutions business are projected to decline 1-5%.
Adjusted operating income is projected to be flat to up 3%.
Operating income at the U.S. Healthcare Solutions segment is anticipated to grow 2-4%.
For the International Healthcare solutions segment, the metric is estimated to decline 3-7%.
Adjusted free cash flow is estimated to be $2 billion.
Summing Up
AmerisourceBergen exited the fiscal fourth quarter on a strong note, wherein both earnings and revenues beat the consensus mark. The company witnessed a robust segmental performance in the quarter under review. The expansion of both gross and operating margins is positive.
Per management, AmerisourceBergen delivered a solid performance by continuing to play a crucial role in the healthcare system while maintaining execution throughout its business. Apart from this, the company's introduction of AB Health Ventures — a dedicated corporate venture capital fund — focused on investing in and collaborating with emerging healthcare startup companies that are involved in transforming healthcare for people and animals worldwide deserves mention.
However, the company faces headwinds like conversion of branded drugs and lower-price generics. Cut-throat competition in the MedTech space remains a concern.
Zacks Rank and Stocks to Consider
Currently, AmerisourceBergen carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader medical space that have announced quarterly results are Elevance Health, Inc. (ELV - Free Report) , Medpace Holdings, Inc. (MEDP - Free Report) and Merit Medical Systems, Inc. (MMSI - Free Report) .
Elevance Health, carrying a Zacks Rank #2 (Buy), reported third-quarter 2022 adjusted EPS of $7.53, which beat the Zacks Consensus Estimate by 6.1%. Revenues of $39.63 billion outpaced the consensus mark by 1.3%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Elevance Health has an earnings yield of 5.5% against the industry’s (2.3%). ELV’s earnings surpassed estimates in all the trailing four quarters, the average being 4.1%.
Medpace Holdings, having a Zacks Rank #1, reported third-quarter 2022 adjusted EPS of $2.05, which beat the Zacks Consensus Estimate by 39.5%. Revenues of $384 million outpaced the consensus mark by 8.1%.
Medpace Holdings has an estimated growth rate of 22.7% for 2022. MEDP’s earnings surpassed estimates in the trailing four quarters, the average being 22.04%.
Merit Medical, flaunting a Zacks Rank #1, reported third-quarter 2022 adjusted EPS of 64 cents, which beat the Zacks Consensus Estimate by 20.8%. Revenues of $287.2 million outpaced the consensus mark by 5.2%.
Merit Medical has an estimated long-term growth rate of 11%. MMSI’s earnings surpassed estimates in all the trailing four quarters, the average being 25.4%.
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AmerisourceBergen (ABC) Q4 Earnings & Revenues Top Estimates
AmerisourceBergen Corporation reported fourth-quarter fiscal 2022 adjusted earnings per share (EPS) of $2.60, which beat the Zacks Consensus Estimate of $2.58 by 0.8%. The bottom line improved 8.8% year over year.
GAAP EPS in the quarter was $1.40, down 32.7% from the year-ago period.
Revenue Details
Revenues increased 3.8% to $61.2 billion in the reported quarter. The top line beat the Zacks Consensus Estimate by 1.5%.
Fiscal 2022 Results
AmerisourceBergen reported full-year revenues of $238.59 billion, up 11.5% year over year. Adjusted EPS grew 19.1% to $11.03.
Segment Realignment Update
It is worth mentioning that AmerisourceBergen made a strategic evaluation of its reporting structure in order to represent its expanded international presence, courtesy of the June 2021 buyout of Alliance Healthcare. Consequently, starting from the second quarter of fiscal 2022, the company realigned its reporting structure under two reportable segments — U.S. Healthcare Solutions and International Healthcare Solutions.
Segmental Analysis
U.S. Healthcare Solutions
Revenues at this segment totaled $54.8 billion, reflecting an increase of 4.7% on a year-over-year basis on the back of an increase in specialty product sales coupled with overall market growth. Lower revenues from commercial COVID-19 treatments partially offset the upside.
Segmental operating income was $578.4 million, up 14% year over year. Higher gross profit (which included fees earned associated with the distribution of government-owned COVID-19 treatments and gross profit on sales to specialty physician practices) contributed to the upside.
AmerisourceBergen Corporation Price, Consensus and EPS Surprise
AmerisourceBergen Corporation price-consensus-eps-surprise-chart | AmerisourceBergen Corporation Quote
International Healthcare Solutions
This segment includes Alliance Healthcare, World Courier, Innomar, Profarma and Profarma Specialty.
Revenues at this segment were $6.4 billion, down 2.7% year over year.
Operating income in the segment was $163.1 million in the quarter, down 12.6% year over year.
Margin Analysis
In the fiscal fourth quarter, AmerisourceBergen reported an adjusted gross profit of $2.1 billion, up 4.8% on a year-over-year basis. As a percentage of revenues, the adjusted gross margin was 3.4% in the quarter, up 4 basis points (bps).
The company reported an adjusted operating income of $741.5 million, up 6.8% year over year. As a percentage of revenues, the adjusted operating margin was 1.2% in the quarter, which expanded 3 bps from the year-ago quarter.
Financial Position
The company exited the quarter with cash and cash equivalents worth $3.39 billion, compared with $3.03 billion in the third quater.
Cumulative net cash used in operating activities at the end of the fiscal fourth quarter totaled $2.7 billion compared with $2.67 billion in the prior-year quarter.
Dividend Update
During the quarter, AmerisourceBergen's board of directors declared a quarterly dividend of 48.5 cents per share, to be paid out on Nov 28, to shareholders at the close of business on Nov 14, 2022.
Fiscal 2023 Guidance
AmerisourceBergen issued its fiscal 2023 outlook, reflecting continued growth in revenues and earnings.
Adjusted EPS is estimated to be $11.30-$11.60 for fiscal 2023, reflecting growth of 2-5% over fiscal 2022. The Zacks Consensus Estimate currently stands at $11.47.
The company estimates revenue growth in fiscal 2023 to be 5-7%.
With respect to the U.S. Healthcare Solutions segment, revenues are expected to grow 6-8%. Revenues at the International Healthcare solutions business are projected to decline 1-5%.
Adjusted operating income is projected to be flat to up 3%.
Operating income at the U.S. Healthcare Solutions segment is anticipated to grow 2-4%.
For the International Healthcare solutions segment, the metric is estimated to decline 3-7%.
Adjusted free cash flow is estimated to be $2 billion.
Summing Up
AmerisourceBergen exited the fiscal fourth quarter on a strong note, wherein both earnings and revenues beat the consensus mark. The company witnessed a robust segmental performance in the quarter under review. The expansion of both gross and operating margins is positive.
Per management, AmerisourceBergen delivered a solid performance by continuing to play a crucial role in the healthcare system while maintaining execution throughout its business. Apart from this, the company's introduction of AB Health Ventures — a dedicated corporate venture capital fund — focused on investing in and collaborating with emerging healthcare startup companies that are involved in transforming healthcare for people and animals worldwide deserves mention.
However, the company faces headwinds like conversion of branded drugs and lower-price generics. Cut-throat competition in the MedTech space remains a concern.
Zacks Rank and Stocks to Consider
Currently, AmerisourceBergen carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader medical space that have announced quarterly results are Elevance Health, Inc. (ELV - Free Report) , Medpace Holdings, Inc. (MEDP - Free Report) and Merit Medical Systems, Inc. (MMSI - Free Report) .
Elevance Health, carrying a Zacks Rank #2 (Buy), reported third-quarter 2022 adjusted EPS of $7.53, which beat the Zacks Consensus Estimate by 6.1%. Revenues of $39.63 billion outpaced the consensus mark by 1.3%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Elevance Health has an earnings yield of 5.5% against the industry’s (2.3%). ELV’s earnings surpassed estimates in all the trailing four quarters, the average being 4.1%.
Medpace Holdings, having a Zacks Rank #1, reported third-quarter 2022 adjusted EPS of $2.05, which beat the Zacks Consensus Estimate by 39.5%. Revenues of $384 million outpaced the consensus mark by 8.1%.
Medpace Holdings has an estimated growth rate of 22.7% for 2022. MEDP’s earnings surpassed estimates in the trailing four quarters, the average being 22.04%.
Merit Medical, flaunting a Zacks Rank #1, reported third-quarter 2022 adjusted EPS of 64 cents, which beat the Zacks Consensus Estimate by 20.8%. Revenues of $287.2 million outpaced the consensus mark by 5.2%.
Merit Medical has an estimated long-term growth rate of 11%. MMSI’s earnings surpassed estimates in all the trailing four quarters, the average being 25.4%.