Summary
Cencora, Inc. (formerly AmerisourceBergen Corporation) reported significant revenue growth in the first two quarters of fiscal year 2014, primarily driven by its expanded distribution contract with Walgreens. Total revenue increased by 38.6% year-over-year for both the three and six-month periods ending March 31, 2014. However, this revenue growth came with a notable decrease in profitability, with net income for the quarter falling to $180.1 million from $45.6 million in the prior year's comparable period, and for the six-month period, net income was $221.5 million compared to $214.2 million. Diluted earnings per share from continuing operations also saw a decline. The company's balance sheet reflects a substantial increase in both accounts receivable and merchandise inventories, likely due to the integration of the Walgreens business. Despite increased revenues, operating income experienced a decline of 14.0% for the quarter and 29.1% for the six-month period. This was influenced by increased operating expenses, particularly distribution, selling, and administrative costs, and a significant warrant expense related to the strategic partnership with Walgreens and Alliance Boots. Investors should closely monitor the impact of the Walgreens partnership on margins and the company's ability to manage inventory and receivables effectively.
Financial Highlights
52 data points| Revenue | $28.46B |
| Cost of Revenue | $27.73B |
| Gross Profit | $729.59M |
| SG&A Expenses | $376.34M |
| Operating Income | $301.13M |
| Net Income | $180.08M |
| EPS (Basic) | $0.78 |
| EPS (Diluted) | $0.76 |
| Shares Outstanding (Basic) | 229.41M |
| Shares Outstanding (Diluted) | 236.27M |
Key Highlights
- 1Revenue surged by 38.6% to $28.5 billion for the quarter and $57.6 billion for the six months ended March 31, 2014, driven by the Walgreens distribution agreement.
- 2Net income for the quarter ended March 31, 2014, was $180.1 million, a significant increase from $45.6 million in the prior year's quarter. For the six months, net income was $221.5 million, up from $214.2 million.
- 3Diluted EPS from continuing operations declined to $0.76 for the quarter and $0.97 for the six months, down from $0.87 and $1.61, respectively, in the prior year.
- 4Operating income decreased by 14.0% for the quarter and 29.1% for the six months, impacted by increased operating expenses and warrant expenses.
- 5The company's balance sheet shows a substantial increase in merchandise inventories (up to $8.5 billion from $7.0 billion) and accounts receivable (up to $6.5 billion from $6.1 billion), reflecting the growth from the Walgreens partnership.
- 6Cash flow from operations significantly decreased to $112.7 million for the six months ended March 31, 2014, compared to $743.7 million in the prior year period, largely due to increased working capital needs.
- 7The company continues to execute its share repurchase program, with $93.2 million remaining availability under an authorized program as of March 31, 2014, and an additional $750 million program authorized.