) first quarter fiscal 2013 earnings (excluding employee
severance and acquisition costs) of 72 cents per share beat the
Zacks Consensus Estimate of 67 cents. A lower share count aided
fourth quarter earnings.
Fourth quarter revenues grew 5.7% to $21.5 billion marginally
missing the Zacks Consensus Estimate of $21.7 billion.
Quarter in Details
Following the acquisition of World Courier Group in 2012,
AmerisourceBergen made some adjustments in its reporting format.
The company decided to report results of the AmerisourceBergen
Drug Corporation (ABDC) and AmerisourceBergen Specialty Group
(ABSG) units under the Pharmaceutical Distribution segment.
Results of the World Courier Group and ABCS have been clubbed
under the "Other" head.
The increase in total revenues in the reported quarter was
primarily attributable to the Pharmaceutical Distribution
Revenues from the Pharmaceutical Distribution segment, which
accounted for 98% of total revenues, increased 5% to $21.1
billion during the reported quarter.
The ABSG unit performed well during the quarter with sales
climbing 10%. Results of the segment were boosted by growth in
third party logistics, blood products, and vaccine and physician
office distribution business at AmerisourceBergen. Revenues at
ABDC segment increased 5% primarily due to increased sales volume
resulting from the implementation of a new contract with the
company's largest customer which was partially offset by the loss
of a food and drug retail group purchasing organization customer.
Revenues from the Other segment were $427.9 million including
significant contributions from recent acquisitions of World
Courier and TheraCom.
Gross profit for the quarter climbed 15.1% to $671.9 million.
Gross profit was boosted by AmerisourceBergen's recent
acquisitions and gains from antitrust litigation settlements.
Operating expenses (excluding employee severance and
acquisition costs) during the quarter climbed 28.0% to $382.7
The quarter saw AmerisourceBergen buy back shares worth $284.7
We note that AmerisourceBergen authorized a new share
repurchase program of $750 million, having completed the earlier
$650 million share buyback program - this should help boost the
bottom line. We believe that the buyback program highlights the
company's commitment to return value to shareholders.
Outlook for Fiscal 2013
AmerisourceBergen reiterated its guidance for fiscal 2013. The
company expects diluted earnings from continuing operations in
the range of $3.06 to $3.16 per share, reflecting year over year
growth of 11% - 14%. The company expects revenues to grow in the
range of 6% - 9%. The company plans to repurchase shares worth at
least $400 million in 2013.
The stock carries a Zacks Rank #3 (Hold rating).
We believe the company is well positioned for growth given the
strong performance of its generics business. However, competition
in the pharmaceutical distribution market remains tough, which
includes players like
Express Scripts Holding
) looks attractive with a Zacks Rank #2 (Buy).
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