) is set to report fiscal second quarter 2014 results on Apr 24,
Last quarter, AmerisourceBergen reported a 1.27% positive
surprise. AmerisourceBergen has delivered positive earnings
surprises in two of the last four quarters with an average beat
Factors at Play
Revenues grew 38.5% to $29.2 billion in the first quarter of
fiscal 2014 due to the on boarding of the brand distribution
AmerisourceBergen had entered into a strategic agreement with
Walgreen and Alliance Boots GmbH in fiscal 2013.The agreement
includes a ten-year pharmaceutical distribution contract with
Walgreen and access to generic drugs and related pharmaceutical
products through the Walgreens Boots Alliance Development joint
venture. We believe the distribution deal with Walgreens will
positively impact results in fiscal 2014.
However, operating margin is projected to be under pressure in
2014 due to revenue mix shift to lower margin business and on
boarding of Walgreens contract. Operating expenses are also
estimated to increase as the company continues to invest in its
core drug business to support substantial volume growth and
maintain high service levels.
Our proven model does not conclusively show that
AmerisourceBergen is likely to beat earnings this quarter. That
is because a stock needs to have both a positive
and a Zacks Rank of #1, 2 or 3 for this to happen. That is
not the case here as you will see below.
The ESP, which represents the difference between the Most
Accurate estimate and the Zacks Consensus Estimate, is 0.00%.
This is because both the Most Accurate Estimate and Zacks
Consensus Estimate currently stand at $1.00.
Zacks Rank #2 (Buy):
AmerisourceBergen's Zacks Rank #2 when combined with a
0.00% ESP makes surprise prediction difficult.
We caution against stocks with Zacks Ranks #4 and #5
(Sell-rated stocks) going into the earnings announcement,
especially when the company is seeing negative estimate revisions
Other Stocks to Consider
Here are some other companies you may want to consider as our
model shows that they have the right combination of elements to
post an earnings beat this quarter:
Eli Lilly and Co.
) has an Earnings ESP of +4.29% and holds a Zacks Rank #3 (Hold).
Eli Lilly will report first quarter earnings on Apr 24.
) has an Earnings ESP of +3.34% and holds a Zacks Rank #2 (Buy).
Actavis will report first quarter earnings on Apr 30.
AMERISOURCEBRGN (ABC): Free Stock Analysis
ACTAVIS PLC (ACT): Free Stock Analysis Report
LILLY ELI & CO (LLY): Free Stock Analysis
WALGREEN CO (WAG): Free Stock Analysis Report
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