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Is a Beat Likely for AmerisourceBergen (ABC) in Q3 Earnings?
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AmerisourceBergen Corporation is scheduled to release fiscal third-quarter 2023 results on Aug 2, before the opening bell.
In the last reported quarter, the company delivered an earnings surprise of 3.44%. Its earnings beat estimates in each of the trailing four quarters, delivering an average surprise of 6.38%.
Q3 Estimates
The Zacks Consensus Estimate for revenues is pegged at $63.41 billion, indicating an improvement of 5.6% from that reported in the prior-year quarter. The same for earnings is pinned at $2.83 per share, implying growth of 8% from the year-ago quarter’s reported figure.
Factors to Note
Sustained strong growth in specialty product sales, coupled with broad-based solid performance and utilization trends across portfolio in the U.S. Healthcare Solutions segment, might have favored ABC’s fiscal third-quarter performance.
The commercial COVID-19 treatments recorded lower sales in the past two quarters. This trend is likely to have continued in the soon-to-be-reported quarter. Revenues from the U.S. Healthcare Solutions segment are expected to grow 6-8% in fiscal 2023. This may get reflected in the fiscal third-quarter results as well. Our model expects third-quarter revenues for this segment to be $56.6 billion.
Operating income at the aforementioned segment is anticipated to grow 3-5% in fiscal 2023. This is likely to get reflected in the fiscal third-quarter results. Our model predicts the segment’s adjusted operating income to be $597.6 million.
Apart from this, the International Healthcare Solutions segment’s World Courier unit is expected to have exhibited solid performance in the quarter under review. In fact, the unit’s impressive track record as an international leader in specialty logistics has enabled AmerisourceBergen to serve customers globally. The company was able to do so despite a challenging COVID-induced environment and additional operational challenges.
Moreover, products of Alliance Healthcare, which was acquired by ABC in 2021, are likely to have driven the latter’s top-line performance. However, unfavorable impact of foreign currency translation and the divestiture of Profarma specialty might have offset growth from World Courier and Alliance Healthcare. Divestiture of the Brazil specialty business in June 2022 is likely to have caused lower sales growth.
Per the fiscal 2023 guidance, operating income at the International Healthcare Solutions segment is estimated to be down 3% to up 1%. This is likely to get reflected in the to-be-reported quarter. Our model expects the segment’s adjusted operating income and revenues to be $183 million and $6.6 billion, respectively.
On its fiscal third-quarter 2023 earnings call, AmerisourceBergen will likely provide an update on the ongoing integration of its of PharmaLex, acquired in January.
Our proven model predicts an earnings beat for AmerisourceBergen this time around. 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 the case here, as you will see below.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate ($2.85) and the Zacks Consensus Estimate ($2.83) is +0.29%. 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 #2 at present.
Other Stocks to Consider
Here are some other medical stocks worth considering as these too have the right combination of elements to post an earnings beat this reporting cycle.
The stock has gained 9.5% year to date. MCK’s earnings beat estimates in the last reported quarter. It has a trailing four-quarter average earnings surprise of 4.48%.
Avanos Medical (AVNS - Free Report) has an Earnings ESP of +0.74% and a Zacks Rank of 3 at present.
The stock has lost 3.5% year to date. AVNS’ earnings missed estimates in the last reported quarter. It has a trailing four-quarter average earnings surprise of 8.03%.
Pacific Biosciences of California (PACB - Free Report) has an Earnings ESP of +5.88% and a Zacks Rank of 3 at present.
The stock has gained 67.3% year to date. PACB’s earnings beat estimates in the last reported quarter. It has a negative four-quarter average earnings surprise of 3.66%.
Image: Bigstock
Is a Beat Likely for AmerisourceBergen (ABC) in Q3 Earnings?
AmerisourceBergen Corporation is scheduled to release fiscal third-quarter 2023 results on Aug 2, before the opening bell.
In the last reported quarter, the company delivered an earnings surprise of 3.44%. Its earnings beat estimates in each of the trailing four quarters, delivering an average surprise of 6.38%.
Q3 Estimates
The Zacks Consensus Estimate for revenues is pegged at $63.41 billion, indicating an improvement of 5.6% from that reported in the prior-year quarter. The same for earnings is pinned at $2.83 per share, implying growth of 8% from the year-ago quarter’s reported figure.
Factors to Note
Sustained strong growth in specialty product sales, coupled with broad-based solid performance and utilization trends across portfolio in the U.S. Healthcare Solutions segment, might have favored ABC’s fiscal third-quarter performance.
The commercial COVID-19 treatments recorded lower sales in the past two quarters. This trend is likely to have continued in the soon-to-be-reported quarter. Revenues from the U.S. Healthcare Solutions segment are expected to grow 6-8% in fiscal 2023. This may get reflected in the fiscal third-quarter results as well. Our model expects third-quarter revenues for this segment to be $56.6 billion.
Operating income at the aforementioned segment is anticipated to grow 3-5% in fiscal 2023. This is likely to get reflected in the fiscal third-quarter results. Our model predicts the segment’s adjusted operating income to be $597.6 million.
Apart from this, the International Healthcare Solutions segment’s World Courier unit is expected to have exhibited solid performance in the quarter under review. In fact, the unit’s impressive track record as an international leader in specialty logistics has enabled AmerisourceBergen to serve customers globally. The company was able to do so despite a challenging COVID-induced environment and additional operational challenges.
Moreover, products of Alliance Healthcare, which was acquired by ABC in 2021, are likely to have driven the latter’s top-line performance. However, unfavorable impact of foreign currency translation and the divestiture of Profarma specialty might have offset growth from World Courier and Alliance Healthcare. Divestiture of the Brazil specialty business in June 2022 is likely to have caused lower sales growth.
Per the fiscal 2023 guidance, operating income at the International Healthcare Solutions segment is estimated to be down 3% to up 1%. This is likely to get reflected in the to-be-reported quarter. Our model expects the segment’s adjusted operating income and revenues to be $183 million and $6.6 billion, respectively.
On its fiscal third-quarter 2023 earnings call, AmerisourceBergen will likely provide an update on the ongoing integration of its of PharmaLex, acquired in January.
AmerisourceBergen Corporation Price and Consensus
AmerisourceBergen Corporation price-consensus-chart | AmerisourceBergen Corporation Quote
Earnings Beat Likely
Our proven model predicts an earnings beat for AmerisourceBergen this time around. 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 the case here, as you will see below.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate ($2.85) and the Zacks Consensus Estimate ($2.83) is +0.29%. 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 #2 at present.
Other Stocks to Consider
Here are some other medical stocks worth considering as these too have the right combination of elements to post an earnings beat this reporting cycle.
McKesson (MCK - Free Report) has an Earnings ESP of +1.93% and a Zacks Rank of 2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The stock has gained 9.5% year to date. MCK’s earnings beat estimates in the last reported quarter. It has a trailing four-quarter average earnings surprise of 4.48%.
Avanos Medical (AVNS - Free Report) has an Earnings ESP of +0.74% and a Zacks Rank of 3 at present.
The stock has lost 3.5% year to date. AVNS’ earnings missed estimates in the last reported quarter. It has a trailing four-quarter average earnings surprise of 8.03%.
Pacific Biosciences of California (PACB - Free Report) has an Earnings ESP of +5.88% and a Zacks Rank of 3 at present.
The stock has gained 67.3% year to date. PACB’s earnings beat estimates in the last reported quarter. It has a negative four-quarter average earnings surprise of 3.66%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.