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What's in Store for AmerisourceBergen (ABC) in Q1 Earnings?

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AmerisourceBergen Corporation (ABC - Free Report) is scheduled to release first-quarter fiscal 2020 results on Jan 30, before the opening bell.

In the last reported quarter, the company delivered a positive earnings surprise of 1.9%. Further, it has an average four-quarter positive surprise of 6.1%.

Let's take a look at how things are shaping up prior to this announcement.

Q1 Estimates

The Zacks Consensus Estimate for first-quarter fiscal 2020 revenues is pegged at $47.98 billion, indicating an improvement of 5.7% from the year-ago quarter. The consensus estimates for earnings stands at $1.67, suggesting growth of 4.4% from the year-ago reported figure.

Pharmaceutical Distribution Unit to Drive Q1

Sustained growth in specialty product sales and expanding customer base at this segment are likely to have benefited the fiscal first-quarter performance. Notably, this segment serves healthcare providers in the pharmaceutical supply channel. Solid organic growth rates in the U.S. pharmaceutical market, population demographics and improving patient access to medical care are likely to have contributed to the to-be-reported quarter’s top line.

The Zacks Consensus Estimate for Pharmaceutical Distribution stands at $46.37 billion, indicating an improvement of 6% from the year-ago quarter.

Moreover, operating income at this segment is expected to improve in the low-to-mid single digit percent range in fiscal 2020, a trend that is likely to get reflected in the to-be-reported quarter.

AmerisourceBergen Corporation Price and EPS Surprise

 

AmerisourceBergen Corporation Price and EPS Surprise

AmerisourceBergen Corporation price-eps-surprise | AmerisourceBergen Corporation Quote

Other Factors to Consider

World Courier unit

The World Courier unit, in particular, is likely to have contributed to the Other segment’s performance in the fiscal first quarter. Bolstering customer experience through new offerings, technology improvements and delivery of high tax logistics services is anticipated to get reflected in the company’s fiscal first-quarter results.

The company’s fiscal first-quarter top line is likely reflect solid demand for its high touch global specialty logistics.

Other Segment

This segment consists of Global Commercialization Services and Animal Health, and includes World Courier, AmerisourceBergen Consulting and MWI. The segment is likely to have contributed to the top line in the to-be-reported quarter, backed by growth in Canadian operations and MWI.

In fact, the Zacks Consensus Estimate for fiscal first-quarter revenues for this segment is pegged at $1.74 billion, suggesting growth of 4% year-ago reported figure.

This apart, the company is likely to have benefited from generics growth in the to-be-reported quarter. Further, new product launches are likely to have contributed to overall performance.

Moreover, stiff competition, as the company operates in a highly competitive pharmaceutical distribution and related health care services market, is likely to have weighed on the fiscal first-quarter performance.

Further, adjusted operating expenses in fiscal 2020 are estimated to increase in the mid-single digit percent range, a trend that is likely to get reflected in the fiscal first-quarter results.

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. This is the case here as you will see.

Earnings ESP: AmerisourceBergen has an Earnings ESP of +0.82%. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.

Zacks Rank: AmerisourceBergen carries a Zacks Rank #3.

Stocks to Consider

Here are a few medical stocks worth considering as they have the right combination of elements to post an earnings beat this quarter.

Stryker Corporation (SYK - Free Report) has an Earnings ESP of +0.60% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

DexCom, Inc. (DXCM - Free Report) has an Earnings ESP of +17.07% and a Zacks Rank #2.

Zimmer Biomet Holdings, Inc. (ZBH - Free Report) has an Earnings ESP of +0.38% and a Zacks Rank #3.

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