Summary
Cencora, Inc. (formerly AmerisourceBergen) reported solid revenue growth for the first six months of fiscal year 2018, with a 10.5% increase in the latest quarter and an 8.2% increase year-to-date. This growth was primarily driven by its Pharmaceutical Distribution Services segment, bolstered by strategic acquisitions such as H.D. Smith and the consolidation of Profarma in Brazil. While gross profit remained relatively flat year-over-year for the quarter, it saw a 3.2% increase for the six-month period. However, the company experienced a significant increase in operating expenses, largely due to integration costs from acquisitions, new IT system implementations, and a suspension of operations at its Memphis compounding facility. Net income for the quarter declined due to lower operating income and higher non-operating losses, partially offset by a lower tax rate. Conversely, net income for the six-month period was significantly higher, largely driven by the favorable impact of the Tax Cuts and Jobs Act of 2017. The company is navigating increased litigation expenses, particularly related to opioid lawsuits, which contributed to higher employee severance, litigation, and other costs. Despite these challenges, Cencora continues to execute its strategic initiatives, including acquisitions and debt management. The company's liquidity remains adequate, supported by operating cash flows and available credit facilities. Investors should monitor the ongoing opioid litigation, the recovery of operations at the Memphis facility, and the integration of recent acquisitions as key factors influencing future performance.
Financial Highlights
56 data points| Revenue | $41.03B |
| Cost of Revenue | $39.78B |
| Gross Profit | $1.26B |
| SG&A Expenses | $617.43M |
| Operating Income | $481.42M |
| Net Income | $287.45M |
| EPS (Basic) | $1.31 |
| EPS (Diluted) | $1.29 |
| Shares Outstanding (Basic) | 219.20M |
| Shares Outstanding (Diluted) | 222.30M |
Key Highlights
- 1Revenue increased by 10.5% in the latest quarter and 8.2% year-to-date, driven by the Pharmaceutical Distribution Services segment and recent acquisitions.
- 2Acquisitions of H.D. Smith and consolidation of Profarma in Brazil significantly contributed to revenue and gross profit growth.
- 3Operating expenses rose substantially due to acquisition integration costs, IT system implementation, and remediation efforts at the Memphis facility.
- 4Net income for the quarter decreased year-over-year due to lower operating income and higher non-operating losses, despite a lower tax rate.
- 5Net income for the six-month period significantly increased, primarily benefiting from the Tax Cuts and Jobs Act of 2017.
- 6The company is incurring increased litigation expenses, notably related to opioid lawsuits, impacting 'employee severance, litigation, and other' costs.
- 7Liquidity remains strong, supported by operating cash flows and substantial availability under credit facilities.