Summary
Cencora, Inc. (COR), formerly AmerisourceBergen, reported strong revenue growth of 9.7% for the fiscal year ended September 30, 2018, reaching $167.9 billion. This growth was primarily driven by its Pharmaceutical Distribution Services segment, bolstered by significant acquisitions like H.D. Smith and consolidation of Profarma. Despite an increase in operating expenses, mainly due to integration costs and IT system implementations, operating income saw a substantial increase of 36.2% compared to the prior year. This improvement was largely attributed to a significant reduction in litigation and severance costs compared to the prior year, which had been impacted by large settlement charges. The company's financial performance was also positively influenced by the Tax Cuts and Jobs Act of 2017, which reduced the U.S. federal corporate tax rate, resulting in a significant income tax benefit. While Cencora's core distribution business remains robust, the company is navigating challenges including an unfavorable pharmaceutical pricing environment, ongoing opioid-related litigation, and regulatory scrutiny on its pharmaceutical compounding operations. These factors, alongside customer concentration risk, present ongoing areas for investor attention.
Financial Highlights
56 data points| Revenue | $167.94B |
| Cost of Revenue | $163.33B |
| Gross Profit | $4.61B |
| SG&A Expenses | $2.46B |
| Operating Income | $1.44B |
| Net Income | $1.66B |
| EPS (Basic) | $7.61 |
| EPS (Diluted) | $7.53 |
| Shares Outstanding (Basic) | 217.87M |
| Shares Outstanding (Diluted) | 220.34M |
Key Highlights
- 1Revenue increased by 9.7% to $167.9 billion, primarily driven by the Pharmaceutical Distribution Services segment and recent acquisitions (H.D. Smith, Profarma consolidation).
- 2Operating income increased by 36.2% due to reduced litigation and severance costs compared to the prior fiscal year.
- 3The company experienced an increase in distribution, selling, and administrative expenses, partly due to integration costs from acquisitions and IT system implementations.
- 4Net income attributable to AmerisourceBergen Corporation significantly increased, benefiting from the Tax Cuts and Jobs Act of 2017 and lower litigation charges from the prior year.
- 5The company repurchased approximately 7.7 million shares of common stock for $663.1 million under its share repurchase program.
- 6A goodwill impairment of $59.7 million was recorded for the Profarma reporting unit.
- 7Cencora is actively engaged in discussions with the FDA and DOJ regarding compliance efforts at its PharMEDium subsidiary, which had voluntarily suspended production at one facility.