AmerisourceBergen posted earnings of $1.01 per share in the third
quarter of fiscal 2014 (ended Jun 30, 2014), which beat the Zacks
Consensus Estimate of $0.92 and were above the year-ago figure of
$0.78 per share. Revenues grew 38.5% to $30.3 billion in the third
quarter of fiscal 2014. Reported revenues easily surpassed the
Zacks Consensus Estimate of $29.2 billion. We are encouraged by the
solid third quarter results, which beat the Zacks Consensus
Estimate on both fronts driven by the onboarding of substantial new
business. The subsequent increase in guidance was impressive as
well. AmerisourceBergen had entered into a strategic agreement with
Walgreen and Alliance Boots GmbH in fiscal 2013. Given the strong
performance of the company so far in fiscal 2014, we believe
AmerisourceBergen is all set to achieve its increased guidance.
Hence, we maintain a Neutral recommendation on the stock.
Chesterbrook, Pa.-based AmerisourceBergen Corporation is one of
the world's largest pharmaceutical services companies. The company
focuses on providing drug distribution and related services to
reduce health care costs and improve patient outcomes. The company
serves healthcare providers and pharmaceutical manufacturers in the
pharmaceutical supply channel. AmerisourceBergen has operations in
the US, Canada, UK and select global markets.
The company reports through two segments Pharmaceutical
Distribution and Other.
The Pharmaceutical Distribution business includes the operations
of AmerisourceBergen Drug Corporation (ABDC) and AmerisourceBergen
Specialty Group (ABSG). Revenues from the Pharmaceutical
Distribution segment increased 12.3% to $86.4 billion in fiscal
The ABSG division provides pharmaceutical distribution and other
services mainly to physicians, who specialize in a variety of
diseases, especially oncology, and to other health care providers,
including dialysis clinics. ABSG also distributes vaccines,
injectables, plasma and other blood products. Moreover, ABSG
provides third party logistics and other services for biotech and
The ABDC division is involved in the distribution of branded
pharma drugs (including specialty pharmaceutical products) and
generic drugs, over-the-counter healthcare products, home
healthcare supplies and equipment and related services to a range
of healthcare providers, which include acute care hospitals and
health systems, independent and chain retail pharmacies, mail order
pharmacies, medical clinics, long-term care and other alternate
site pharmacies. Additionally, ABDC provides pharmacy management,
staffing and other consulting services, scalable automated pharmacy
dispensing equipment, medication and supply dispensing cabinets and
supply management software to a broad range of retail and
institutional healthcare providers along with delivering packaging
solutions to institutional and retail healthcare providers.
The "Others" segment consists of the AmerisourceBergen
Consulting Services (ABCS) and World Courier segments. This segment
reported revenues of $1.8 billion in fiscal 2013, up almost 33.1%
from fiscal 2012.
The ABCS business provides commercialization support services to
pharmaceutical and biotech manufacturers. These include
reimbursement support programs, outcomes research, contract field
staffing, patient assistance and co-pay assistance programs,
adherence programs, risk mitigation services, and other market
World Courier (acquired in May 2012) provides speciality
transportation and logistics services to the biopharmaceutical
industry in over 50 countries.
In order to streamline its operations, the company sold its
Canadian pharmaceutical distribution business, AmerisourceBergen
Canada Corporation (ABCC) to Kohl & Frisch Limited in Jun 2013.
AmerisourceBergen Corporation retained its specialty business unit
In May 2013, the company also sold AndersonBrecon its contract
pharmaceutical packaging business clinical trials services business
in the US and the UK to a conglomerate of an investor group led by
Frazier Healthcare VI, L.P for approximately $308 million in cash.
This business generated revenues of $230.9 million in fiscal
The company's fiscal year ends on Sep 30. Total revenues in
fiscal 2013 came in at $87.9 billion.
AmerisourceBergen Corporation (ABC): Read the Full
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