Summary
Cencora, Inc. (COR) demonstrated robust revenue growth in fiscal year 2016, driven by an 8.0% increase attributed to strong performance in its Pharmaceutical Distribution segment, bolstered by acquisitions like MWI and PharMEDium. While gross profit saw a significant increase of 21.1% year-over-year, partly due to a reduction in LIFO expense and antitrust litigation gains, the company's pharmaceutical distribution segment's gross profit margin slightly declined due to pricing pressures and less favorable contract renewals. The company managed its expenses effectively, with distribution, selling, and administrative expenses increasing due to acquisitions but remaining a relatively stable percentage of revenue. A notable factor impacting the year's financial results was the significant decrease in Warrants expense, a positive development for the company. Cencora also continued its commitment to shareholder returns through dividend increases and substantial share repurchases, reflecting confidence in its financial position and future prospects despite facing a competitive market and ongoing regulatory scrutiny.
Financial Highlights
54 data points| Revenue | $146.85B |
| Cost of Revenue | $142.58B |
| Gross Profit | $4.27B |
| SG&A Expenses | $2.09B |
| Operating Income | $1.53B |
| Net Income | $1.43B |
| EPS (Basic) | $6.73 |
| EPS (Diluted) | $6.32 |
| Shares Outstanding (Basic) | 212.21M |
| Shares Outstanding (Diluted) | 225.96M |
Key Highlights
- 1Revenue increased by 8.0% to $146.8 billion, primarily driven by growth in the Pharmaceutical Distribution segment and contributions from recent acquisitions (MWI and PharMEDium).
- 2Gross profit increased by 21.1% to $4.3 billion, benefiting from a $342.6 million decrease in LIFO expense and a $68.3 million increase in antitrust litigation settlement gains.
- 3Distribution, selling, and administrative expenses increased by 9.6% largely due to the acquisitions of MWI and PharMEDium.
- 4Warrants expense decreased significantly from $912.7 million in the prior year to $140.3 million, mainly due to a decline in the company's stock price.
- 5The company successfully managed its debt, with interest expense, net, increasing by 28.3% primarily due to increased borrowings to finance acquisitions.
- 6Cencora continued to return capital to shareholders, increasing its quarterly dividend by 7% in November 2016 and repurchasing shares under its authorized programs.
- 7The company faced some headwinds, including unfavorable trends in brand and generic pharmaceutical pricing and less favorable terms on renewed contracts with key customers like the Department of Defense and Kaiser Permanente.