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COR Stock Gains on Q1 Earnings & Revenue Beat & Upbeat '25 Outlook
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Cencora, Inc. (COR - Free Report) reported first-quarter fiscal 2025 adjusted earnings per share (EPS) of $3.73, which beat the Zacks Consensus Estimate of $3.50 by 6.6%. The bottom line also improved 13.7% year over year.
GAAP EPS was $2.50, down 16.1% from the year-ago period’s level.
The decline in GAAP EPS has likely resulted from the absence of a credit of $78.9 million related to litigation and opioid-related expenses recorded in the year-ago quarter.
Revenues in this segment totaled $74 billion, up 13.6% on a year-over-year basis. This improvement was driven by overall market growth on increased unit volume, including increased sales of GLP-1 drugs and specialty products.
Segmental operating income totaled $767.3 million, up 9.9% year over year. Higher gross profit (including fees earned from distributing government-owned COVID-19 treatments and gross profit on sales to specialty physician practices) contributed to the upside, partly offset by increased operating expenses.
International Healthcare Solutions
This segment includes Alliance Healthcare, World Courier, Innomar and Profarma Specialty.
Revenues amounted to $7.5 billion, up 5.5% year over year. The top line increased 8.5% at constant currency (cc).
Operating income totaled $182.1 million, down 2.9% on a reported basis but up 3.3% at cc. The reported decline was due to lower operating income at COR’s global specialty logistics business, partially offset by an increase in its European distribution business.
Margin Analysis
Cencora reported an adjusted gross profit of $2.5 billion, up 6.1% on a year-over-year basis. As a percentage of revenues, the adjusted gross margin was 3.1%, down 20 basis points (bps) year over year.
The company recorded an adjusted operating income of $949.3 million, up 7.2% year over year. As a percentage of revenues, the adjusted operating margin was 1.2%, which contracted 7 bps from the year-ago quarter’s level.
Financial Update
COR exited the fiscal first quarter with cash and cash equivalents worth $3.22 billion compared with $3.13 billion in the previous quarter.
Cumulative net cash used in operating activities totaled $2.72 billion against $885.2 million in net cash provided by operating activities a year ago.
Dividend Update
Cencora's board of directors declared a quarterly dividend of 55 cents per share. The new dividend is payable on March 03, 2025, to shareholders of record at the close of business on Feb. 14, 2025.
FY25 Guidance
The company issued an updated outlook for fiscal 2025 earnings and revenues, primarily to include the impact of COR’s acquisition of RCA, a leading management services organization of retina specialists, completed last month.
Adjusted EPS is estimated to be in the $15.15-$15.45 range, indicating growth of 8-10% from the prior-year reported level. The guidance was also up from the previous projection of 14.80-$15.10. The Zacks Consensus Estimate for the same is pegged at $15.14.
Revenues are now projected to rise 8-10% for fiscal 2025 compared with the earlier guided range of 7-9%. The top line at the U.S. Healthcare Solutions segment and the International Healthcare solutions business is estimated to increase 9-11% and 4-5%, respectively. The previous guidance anticipated sales at both segments to grow 7-9%.
Adjusted operating income is expected to improve 11.5-13.5% for fiscal 2025, up from the earlier guidance of 5-6.5%.
Operating income for the U.S. Healthcare Solutions segment is now expected to improve 11.5-13.5% (previously 5-6.5%) while the same for International Healthcare solutions business is estimated to remain flat ((previously 5-6.5%)) but grow approximately 5% at cc.
Our Take
Cencora exited the fiscal first quarter on a strong note, wherein its earnings and revenues beat the Zacks Consensus Estimate. The company’s guidance for fiscal 2025 was also above estimates. Shares of the company were up 0.8% following the robust quarterly results. In the past six months, COR’s shares have gained 4.9% against the industry’s decline of 12.8%. The S&P 500 Index was up 15.6% in the same time period.
Image Source: Zacks Investment Research
The company continues to witness robust segmental performance due to growth in all markets and strong demand for specialty products and 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 has been focused on its priorities and thoughtfully deployed capital to deliver long-term growth.
The acquisition of RCS looks promising as it will become accretive to this fiscal year’s bottom line.
However, COR’s gross margin continues to be hurt by lower-margin GLP-1 drugs and lack of exclusive COVID-19 therapy sales, which had higher gross profit margins. The company’s rising expenses to support business activities amid inflationary challenges put pressure on the operating margin. Cut-throat competition in the MedTech space is another headwind.
PEN’s earnings beat estimates in three of the trailing four quarters and missed in one, delivering an average surprise of 10.54%. The company is scheduled to release fourth-quarter results on Feb. 18.
PEN’s shares have gained 42.8% compared with the industry’s 3.9% growth in the past six months.
Masimo, carrying a Zacks Rank #2 (Buy) at present, has an estimated growth rate of 11.8% for 2025.
MASI’s earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 17.10%. Its shares have risen 58.5% compared with the industry’s 3.9% growth year to date. The company is scheduled to release fourth-quarter results on Feb. 25.
Inogen, carrying a Zacks Rank of 2 at present, has an estimated earnings growth rate of 14.5% for 2025. It delivered a trailing four-quarter average earnings surprise of 12.40%. The company is scheduled to release fourth-quarter results on Feb. 25.
INGN’s shares have risen 31.3% in the past six months compared with the industry’s 10.6% growth.
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COR Stock Gains on Q1 Earnings & Revenue Beat & Upbeat '25 Outlook
Cencora, Inc. (COR - Free Report) reported first-quarter fiscal 2025 adjusted earnings per share (EPS) of $3.73, which beat the Zacks Consensus Estimate of $3.50 by 6.6%. The bottom line also improved 13.7% year over year.
GAAP EPS was $2.50, down 16.1% from the year-ago period’s level.
The decline in GAAP EPS has likely resulted from the absence of a credit of $78.9 million related to litigation and opioid-related expenses recorded in the year-ago quarter.
Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.
Revenue Details
Revenues totaled $81.49 billion, up 12.8% year over year. The top line beat the Zacks Consensus Estimate by 4.3%.
Cencora, Inc. Price, Consensus and EPS Surprise
Cencora, Inc. price-consensus-eps-surprise-chart | Cencora, Inc. Quote
Segmental Analysis
U.S. Healthcare Solutions
Revenues in this segment totaled $74 billion, up 13.6% on a year-over-year basis. This improvement was driven by overall market growth on increased unit volume, including increased sales of GLP-1 drugs and specialty products.
Segmental operating income totaled $767.3 million, up 9.9% year over year. Higher gross profit (including fees earned from distributing government-owned COVID-19 treatments and gross profit on sales to specialty physician practices) contributed to the upside, partly offset by increased operating expenses.
International Healthcare Solutions
This segment includes Alliance Healthcare, World Courier, Innomar and Profarma Specialty.
Revenues amounted to $7.5 billion, up 5.5% year over year. The top line increased 8.5% at constant currency (cc).
Operating income totaled $182.1 million, down 2.9% on a reported basis but up 3.3% at cc. The reported decline was due to lower operating income at COR’s global specialty logistics business, partially offset by an increase in its European distribution business.
Margin Analysis
Cencora reported an adjusted gross profit of $2.5 billion, up 6.1% on a year-over-year basis. As a percentage of revenues, the adjusted gross margin was 3.1%, down 20 basis points (bps) year over year.
The company recorded an adjusted operating income of $949.3 million, up 7.2% year over year. As a percentage of revenues, the adjusted operating margin was 1.2%, which contracted 7 bps from the year-ago quarter’s level.
Financial Update
COR exited the fiscal first quarter with cash and cash equivalents worth $3.22 billion compared with $3.13 billion in the previous quarter.
Cumulative net cash used in operating activities totaled $2.72 billion against $885.2 million in net cash provided by operating activities a year ago.
Dividend Update
Cencora's board of directors declared a quarterly dividend of 55 cents per share. The new dividend is payable on March 03, 2025, to shareholders of record at the close of business on Feb. 14, 2025.
FY25 Guidance
The company issued an updated outlook for fiscal 2025 earnings and revenues, primarily to include the impact of COR’s acquisition of RCA, a leading management services organization of retina specialists, completed last month.
Adjusted EPS is estimated to be in the $15.15-$15.45 range, indicating growth of 8-10% from the prior-year reported level. The guidance was also up from the previous projection of 14.80-$15.10. The Zacks Consensus Estimate for the same is pegged at $15.14.
Revenues are now projected to rise 8-10% for fiscal 2025 compared with the earlier guided range of 7-9%. The top line at the U.S. Healthcare Solutions segment and the International Healthcare solutions business is estimated to increase 9-11% and 4-5%, respectively. The previous guidance anticipated sales at both segments to grow 7-9%.
Adjusted operating income is expected to improve 11.5-13.5% for fiscal 2025, up from the earlier guidance of 5-6.5%.
Operating income for the U.S. Healthcare Solutions segment is now expected to improve 11.5-13.5% (previously 5-6.5%) while the same for International Healthcare solutions business is estimated to remain flat ((previously 5-6.5%)) but grow approximately 5% at cc.
Our Take
Cencora exited the fiscal first quarter on a strong note, wherein its earnings and revenues beat the Zacks Consensus Estimate. The company’s guidance for fiscal 2025 was also above estimates. Shares of the company were up 0.8% following the robust quarterly results. In the past six months, COR’s shares have gained 4.9% against the industry’s decline of 12.8%. The S&P 500 Index was up 15.6% in the same time period.
Image Source: Zacks Investment Research
The company continues to witness robust segmental performance due to growth in all markets and strong demand for specialty products and 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 has been focused on its priorities and thoughtfully deployed capital to deliver long-term growth.
The acquisition of RCS looks promising as it will become accretive to this fiscal year’s bottom line.
However, COR’s gross margin continues to be hurt by lower-margin GLP-1 drugs and lack of exclusive COVID-19 therapy sales, which had higher gross profit margins. The company’s rising expenses to support business activities amid inflationary challenges put pressure on the operating margin. Cut-throat competition in the MedTech space is another headwind.
COR’s Zacks Rank & Other Key Picks
COR carries a Zacks Rank #2 (Buy) at present.
Some other top-ranked stocks in the broader medical space are Penumbra (PEN - Free Report) , Masimo (MASI - Free Report) and Inogen (INGN - Free Report) .
Penumbra, carrying a Zacks Rank #1 (Strong Buy) at present, has an estimated growth rate of 37.5% for 2025. You can see the complete list of today’s Zacks #1 Rank stocks here.
PEN’s earnings beat estimates in three of the trailing four quarters and missed in one, delivering an average surprise of 10.54%. The company is scheduled to release fourth-quarter results on Feb. 18.
PEN’s shares have gained 42.8% compared with the industry’s 3.9% growth in the past six months.
Masimo, carrying a Zacks Rank #2 (Buy) at present, has an estimated growth rate of 11.8% for 2025.
MASI’s earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 17.10%. Its shares have risen 58.5% compared with the industry’s 3.9% growth year to date. The company is scheduled to release fourth-quarter results on Feb. 25.
Inogen, carrying a Zacks Rank of 2 at present, has an estimated earnings growth rate of 14.5% for 2025. It delivered a trailing four-quarter average earnings surprise of 12.40%. The company is scheduled to release fourth-quarter results on Feb. 25.
INGN’s shares have risen 31.3% in the past six months compared with the industry’s 10.6% growth.