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Cencora Corporation (COR - Free Report) reported fourth-quarter fiscal 2023 adjusted earnings per share (EPS) of $2.86, which beat the Zacks Consensus Estimate of $2.79 by 2.5%. The bottom line improved 10% year over year.
GAAP EPS was $1.72, up 22.9% from that reported in the year-ago period.
Cencora was formerly known as AmerisourceBergen with ticker ABC. The company changed its name and ticker symbol to Cencora and COR, respectively, effective Aug 30.
Revenue Details
Revenues totaled $68.92 billion, up 12.7% year over year. The top line beat the Zacks Consensus Estimate by 3.5%.
Segmental Analysis
U.S. Healthcare Solutions
Revenues at this segment totaled $61.93 billion, up 13% on a year-over-year basis. This improvement was due to overall market growth and increased specialty product sales. High demand for recently-approved GLP-1 drugs for diabetes and/or weight loss has helped accelerate growth during the quarter.
Segmental operating income totaled $632.8 million, up 9.4% year over year. Higher gross profit (including fees earned from the distribution of government-owned COVID-19 treatments and gross profit on sales to specialty physician practices) contributed to the upside.
International Healthcare Solutions
This segment includes Alliance Healthcare, World Courier, Innomar and Profarma Specialty.
Revenues totaled $7 billion, up 9.5% year over year on the back of increased revenues across all businesses. The top line increased 10.1% at constant currency (cc).
Operating income totaled $168.2 million, up 3.1% reportedly and 4% at cc.
Margin Analysis
Cencora reported an adjusted gross profit of $2.3 billion, up 9.4% on a year-over-year basis. As a percentage of revenues, the adjusted gross margin was 3.3%, down 10 basis points (bps) year over year.
The company recorded an adjusted operating income of $801 million, up 8% year over year. The metric was up 8.2% at cc. As a percentage of revenues, the adjusted operating margin was 1.2%, which contracted 5 bps from the year-ago quarter’s number.
Full-Year Results
For full-year fiscal 2023, Cencora reported revenues of $262.17 billion, up 9.9% year over year. Adjusted EPS during the period improved 8.7% to $11.99.
COR exited the fiscal fourth quarter with cash and cash equivalents worth $2.59 billion compared with $1.39 billion in the prior-year quarter.
Cumulative net cash used in operating activities totaled $3.91 billion compared with $2.7 billion in the year-ago period.
Dividend Update
During the quarter, Cencora's board of directors declared a quarterly dividend of 51 cents per share, payable on Nov 27, 2023, to shareholders of record at the close of business on Nov 13, 2023.
Fiscal 2024 Guidance
The company issued its outlook for fiscal 2024 earnings and revenues.
Adjusted EPS is estimated in the range of $12.70-$13.00, indicating growth of 6-8.4% over the fiscal 2023 level. The Zacks Consensus Estimate for the same is currently pegged at $12.82.
Revenues are projected to increase 7-10%, reportedly as well as at cc. The top line at the U.S. Healthcare Solutions segment is also expected to grow 7-10%. Revenues at the International Healthcare solutions business are estimated to be up 4-8%.
Adjusted operating income is expected to improve 4-6% reportedly and 5-7% at cc. Excluding contributions related to COVID-19 and currency fluctuations, the figure is projected to increase 7-9% and 8-10%, reportedly and at cc, respectively.
Operating income at the U.S. Healthcare Solutions segment is anticipated to grow 4-7%. For the International Healthcare Solutions segment, the company's revised guidance for the metric is 1-4%.
Summing Up
Cencora exited the fiscal fourth quarter on a strong note, wherein both earnings and revenues beat their respective consensus mark. The company witnessed a strong segmental performance due to growth in all markets and strong demand for specialty products, especially GLP-1 drugs.
Per management, Cencora delivered a solid performance by playing a crucial role in the healthcare system while maintaining efficiency throughout its business. The company remains focused on its strategic priorities and thoughtful capital deployment to deliver long-term growth.
However, COR faces headwinds like conversion of branded drugs and lower-price generics. Cut-throat competition in the MedTech space remains a concern.
Zacks Rank
Cencora currently carries a Zacks Rank #2 (Buy).
Other Stocks to Consider
Some other top-ranked stocks in the broader medical space that have announced quarterly results are Abbott Laboratories (ABT - Free Report) , DexCom (DXCM - Free Report) and Integer Holdings (ITGR - Free Report) .
Revenues of $10.14 billion outpaced the consensus mark by 3.6%.
Abbott has a long-term estimated growth rate of 5.1%. ABT’s earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 6.76%.
DexCom reported third-quarter 2023 adjusted EPS of 50 cents, which beat the Zacks Consensus Estimate by 47.1%. Revenues of $975 million beat the Zacks Consensus Estimate by 4%. The company currently carries a Zacks Rank #2.
DXCM has a long-term estimated growth rate of 33.6%. Its earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 36.43%.
Integer Holdings reported third-quarter 2023 adjusted EPS of $1.27 and revenues of $405 million, which beat their respective Zacks Consensus Estimate by 21% and 8.7%. It currently carries a Zacks Rank #2.
ITGR has a long-term estimated growth rate of 15.8%. Its earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 11.98%.
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Cencora (COR) Q4 Earnings Top, GLP-1 Drugs Boost Sales
Cencora Corporation (COR - Free Report) reported fourth-quarter fiscal 2023 adjusted earnings per share (EPS) of $2.86, which beat the Zacks Consensus Estimate of $2.79 by 2.5%. The bottom line improved 10% year over year.
GAAP EPS was $1.72, up 22.9% from that reported in the year-ago period.
Cencora was formerly known as AmerisourceBergen with ticker ABC. The company changed its name and ticker symbol to Cencora and COR, respectively, effective Aug 30.
Revenue Details
Revenues totaled $68.92 billion, up 12.7% year over year. The top line beat the Zacks Consensus Estimate by 3.5%.
Segmental Analysis
U.S. Healthcare Solutions
Revenues at this segment totaled $61.93 billion, up 13% on a year-over-year basis. This improvement was due to overall market growth and increased specialty product sales. High demand for recently-approved GLP-1 drugs for diabetes and/or weight loss has helped accelerate growth during the quarter.
Segmental operating income totaled $632.8 million, up 9.4% year over year. Higher gross profit (including fees earned from the distribution of government-owned COVID-19 treatments and gross profit on sales to specialty physician practices) contributed to the upside.
International Healthcare Solutions
This segment includes Alliance Healthcare, World Courier, Innomar and Profarma Specialty.
Revenues totaled $7 billion, up 9.5% year over year on the back of increased revenues across all businesses. The top line increased 10.1% at constant currency (cc).
Operating income totaled $168.2 million, up 3.1% reportedly and 4% at cc.
Margin Analysis
Cencora reported an adjusted gross profit of $2.3 billion, up 9.4% on a year-over-year basis. As a percentage of revenues, the adjusted gross margin was 3.3%, down 10 basis points (bps) year over year.
The company recorded an adjusted operating income of $801 million, up 8% year over year. The metric was up 8.2% at cc. As a percentage of revenues, the adjusted operating margin was 1.2%, which contracted 5 bps from the year-ago quarter’s number.
Full-Year Results
For full-year fiscal 2023, Cencora reported revenues of $262.17 billion, up 9.9% year over year. Adjusted EPS during the period improved 8.7% to $11.99.
Cencora, Inc. Price, Consensus and EPS Surprise
Cencora, Inc. price-consensus-eps-surprise-chart | Cencora, Inc. Quote
Financial Position
COR exited the fiscal fourth quarter with cash and cash equivalents worth $2.59 billion compared with $1.39 billion in the prior-year quarter.
Cumulative net cash used in operating activities totaled $3.91 billion compared with $2.7 billion in the year-ago period.
Dividend Update
During the quarter, Cencora's board of directors declared a quarterly dividend of 51 cents per share, payable on Nov 27, 2023, to shareholders of record at the close of business on Nov 13, 2023.
Fiscal 2024 Guidance
The company issued its outlook for fiscal 2024 earnings and revenues.
Adjusted EPS is estimated in the range of $12.70-$13.00, indicating growth of 6-8.4% over the fiscal 2023 level. The Zacks Consensus Estimate for the same is currently pegged at $12.82.
Revenues are projected to increase 7-10%, reportedly as well as at cc. The top line at the U.S. Healthcare Solutions segment is also expected to grow 7-10%. Revenues at the International Healthcare solutions business are estimated to be up 4-8%.
Adjusted operating income is expected to improve 4-6% reportedly and 5-7% at cc. Excluding contributions related to COVID-19 and currency fluctuations, the figure is projected to increase 7-9% and 8-10%, reportedly and at cc, respectively.
Operating income at the U.S. Healthcare Solutions segment is anticipated to grow 4-7%. For the International Healthcare Solutions segment, the company's revised guidance for the metric is 1-4%.
Summing Up
Cencora exited the fiscal fourth quarter on a strong note, wherein both earnings and revenues beat their respective consensus mark. The company witnessed a strong segmental performance due to growth in all markets and strong demand for specialty products, especially GLP-1 drugs.
Per management, Cencora delivered a solid performance by playing a crucial role in the healthcare system while maintaining efficiency throughout its business. The company remains focused on its strategic priorities and thoughtful capital deployment to deliver long-term growth.
However, COR faces headwinds like conversion of branded drugs and lower-price generics. Cut-throat competition in the MedTech space remains a concern.
Zacks Rank
Cencora currently carries a Zacks Rank #2 (Buy).
Other Stocks to Consider
Some other top-ranked stocks in the broader medical space that have announced quarterly results are Abbott Laboratories (ABT - Free Report) , DexCom (DXCM - Free Report) and Integer Holdings (ITGR - Free Report) .
Abbott, carrying a Zacks Rank of 2 at present, reported third-quarter 2023 adjusted EPS of $1.14, which beat the Zacks Consensus Estimate by 3.6%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Revenues of $10.14 billion outpaced the consensus mark by 3.6%.
Abbott has a long-term estimated growth rate of 5.1%. ABT’s earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 6.76%.
DexCom reported third-quarter 2023 adjusted EPS of 50 cents, which beat the Zacks Consensus Estimate by 47.1%. Revenues of $975 million beat the Zacks Consensus Estimate by 4%. The company currently carries a Zacks Rank #2.
DXCM has a long-term estimated growth rate of 33.6%. Its earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 36.43%.
Integer Holdings reported third-quarter 2023 adjusted EPS of $1.27 and revenues of $405 million, which beat their respective Zacks Consensus Estimate by 21% and 8.7%. It currently carries a Zacks Rank #2.
ITGR has a long-term estimated growth rate of 15.8%. Its earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 11.98%.