Summary
Cencora, Inc. (formerly AmerisourceBergen Corporation) reported its third fiscal quarter results for the period ending December 30, 2019. The company saw a 5.4% increase in revenue year-over-year, driven primarily by its Pharmaceutical Distribution Services segment and growth in its 'Other' segments, which include MWI Animal Health and Global Commercialization Services. This revenue growth was partially offset by a significant decline in gross profit, largely due to lower gains from antitrust litigation settlements and a shift from a LIFO credit to LIFO expense. The company's operating income experienced a substantial decrease of 44.9%, significantly impacted by a $138 million impairment charge related to PharMEDium's long-lived assets. Additionally, net income attributable to AmerisourceBergen Corporation was considerably lower due to the impairment charge, a decrease in gross profit, and a one-time tax benefit recognized in the prior year. The company also announced its decision to exit the PharMEDium compounding business in early 2020, anticipating further impairments and exit costs, but also a significant tax benefit.
Financial Highlights
56 data points| Revenue | $47.86B |
| Cost of Revenue | $46.63B |
| Gross Profit | $1.23B |
| SG&A Expenses | $685.95M |
| Operating Income | $263.44M |
| Net Income | $187.64M |
| EPS (Basic) | $0.91 |
| EPS (Diluted) | $0.90 |
| Shares Outstanding (Basic) | 206.01M |
| Shares Outstanding (Diluted) | 207.52M |
Key Highlights
- 1Revenue increased by 5.4% to $47.86 billion compared to the prior year quarter, driven by the Pharmaceutical Distribution Services segment and growth in 'Other' segments.
- 2Gross profit decreased by 5.1% to $1.23 billion, negatively impacted by lower antitrust litigation settlement gains and a LIFO expense versus a LIFO credit in the prior year.
- 3Operating income fell significantly by 44.9% to $263.4 million, primarily due to a $138 million impairment of long-lived assets related to the PharMEDium business.
- 4Net income attributable to AmerisourceBergen Corporation decreased significantly, largely due to the PharMEDium asset impairment and a favorable tax benefit in the prior year quarter.
- 5The company plans to exit the PharMEDium compounding business in early 2020, which is expected to result in further asset impairments and exit costs but also an estimated $500-$600 million tax benefit.
- 6Total debt remained relatively stable, with approximately $4.17 billion outstanding, while cash and cash equivalents were $3.23 billion as of December 31, 2019.
- 7The company repurchased $129.8 million of its common stock during the quarter, and its Board of Directors increased the quarterly dividend by 5% in January 2020.