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What's in Store for AmerisourceBergen's (ABC) Q2 Earnings?

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AmerisourceBergen Corporation is scheduled to release second-quarter fiscal 2020 results on May 7, before the opening bell.

In the last reported quarter, the company delivered a positive earnings surprise of 5.4%. Its earnings surpassed estimates in each of the trailing four quarters, the average beat being 5.7%.

Q2 Estimates

The Zacks Consensus Estimate for second-quarter fiscal 2020 revenues is pegged at $45.94 billion, indicating an improvement of 6% from the year-ago quarter. The consensus estimates for earnings stands at $2.28, suggesting growth of 8.1% from the year-ago reported figure.

Pharmaceutical Distribution Unit Holds Key

Sustained growth in specialty product sales and expanding customer base at this segment are likely to have benefited the fiscal second-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 might get reflected in the to-be-reported quarter’s results.

The Zacks Consensus Estimate for Pharmaceutical Distribution stands at $46.86 billion, indicating an improvement of 5.2% from the year-ago quarter.

Moreover, operating income at this segment is expected to improve in the mid-single digit percent range in fiscal 2020.

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 second quarter. Enhancing customer experience through new offerings, technology improvements and delivery of high tax logistics services is anticipated to get reflected in the fiscal second-quarter results.

The company’s to-be-reported quarter’s results are likely to 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, courtesy of growth in AmerisourceBergen Consulting Services and MWI.

In fact, the Zacks Consensus Estimate for fiscal first-quarter revenues for this segment is pegged at $1.81 billion, suggesting growth of 8.5% year-ago reported figure.

Apart from this, the company is likely to have gained from generics growth in the to-be-reported quarter. Further, new product launches may have contributed to overall performance.

However, 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 second-quarter performance.

Further, adjusted operating expenses in fiscal 2020 are estimated to increase in the mid-single digit percent range.

Moreover, it is important to note here that with the coronavirus outbreak intensifying around late February, the company’s performance in the to-be-reported quarter might have been impacted by the same.

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 not the case here as you will see.

Earnings ESP: AmerisourceBergen has an Earnings ESP of -0.64%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: It carries a Zacks Rank #3.

Stocks Worth a Look

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

Exact Sciences Corporation (EXAS - Free Report) has an Earnings ESP of +2.28% and a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Haemonetics Corporation (HAE - Free Report) has an Earnings ESP of +2.76% and a Zacks Rank of 3.

Aurora Cannabis Inc. (ACB - Free Report) has an Earnings ESP of +9.09% and a Zacks Rank of 3.

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