) reiterated its guidance for fiscal 2014 at its analyst day held
recently in New York.
AmerisourceBergen continues to expect earnings per share from
continuing operations (excluding extraordinary items) in fiscal
2014 around $3.60 - $3.73, up 12% - 16% over $3.21 reported in
fiscal 2013. The Zacks Consensus Estimate of $3.70 was well
within the company's projected range.
AmerisourceBergen expects revenues to grow in the 28% - 31%
range. Operating income is projected to grow in the 12% - 16%
range. However, operating margin is estimated to decline due to
the on-boarding of a significant new lower margin business.
AmerisourceBergen also expects to repurchase shares for $500
million, mostly in the second half of fiscal 2014.
We note that growth drivers in fiscal 2014 include generic
launches, increased top-line growth due to the generic calendar
and market expansion.
AmerisourceBergen's contract with
) and distribution agreement with
) should positively impact the top line in fiscal 2014.
AmerisourceBergen streamlined its operations in fiscal 2013 in
order to focus on its core specialty distribution business. We
remind investors that the company sold its Canadian
pharmaceutical distribution business, AmerisourceBergen Canada
Corporation (ABCC) to Kohl & Frisch Limited in Jun 2013. 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
However, a decline in reimbursement rates for oncology drugs
continues to be a challenge for AmerisourceBergen.
Nevertheless, we expect AmerisourceBergen to meet its set
targets in fiscal 2014. The company increased its dividend by 12%
in Nov 2013. The dividend increase and the share buyback program
highlight the company's commitment to return value to
AmerisourceBergen currently carries a Zacks Rank #3 (Hold).
) looks attractive with a Zacks Rank #1 (Strong Buy).
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