By Padmanabhan Ananthan
Aug 5 (Reuters) – U.S. drug distributor Cencora raised its annual adjusted profit forecast on Wednesday after quarterly results beat Wall Street expectations, driven by strong demand for specialty medicines, sending its shares up 3.7% in morning trade.
Here are the details:
• The company has been sharpening its focus on drug distribution, offloading its non-core businesses while doubling down on its core segments to drive long-term performance.
• Cencora and its peers, including Cardinal Health and McKesson, have long benefited from strong demand for expensive specialty drugs used to treat diseases such as cancer and rheumatoid arthritis, a segment that offers more attractive profit margins.
• Third-quarter sales at Cencora’s U.S. healthcare business, its largest unit by revenue, rose 4.9% to $74.86 billion, helped by strength in specialty medicines and GLP-1 drugs.
• Total third quarter revenue of $84.75 billion beat analysts’ estimates of $84.32 billion, according to data compiled by LSEG.
• Cencora’s proposed merger of MWI Animal Health and Covetrus would hit operating profit by roughly $150 million if it closes mid-fiscal year, CFO Eva Boratto said, adding that no timeline had been set.
• Barclays analyst Glen Santangelo said a rebound in U.S. Healthcare revenue and adjusted operating income growth should help ease concerns over specialty drug volumes and GLP-1 pressures that weighed on the stock in the previous quarter.
• Cencora now expects annual profit in the range of $17.75 and $17.95 per share, higher than its previous expectation of $17.65 and $17.90 per share.
• The company earned an adjusted $4.48 per share for the quarter ended June 30, beating estimates of $4.35 per share.
• Cencora kept its annual revenue growth forecast intact at 4% to 6%.
(Reporting by Padmanabhan Ananthan in Bengaluru; Editing by Tasim Zahid)
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