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Why Is Cencora (COR) Down 2.8% Since Last Earnings Report?
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It has been about a month since the last earnings report for Cencora (COR - Free Report) . Shares have lost about 2.8% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Cencora due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Cencora reported third-quarter fiscal 2024 adjusted earnings per share of $3.34, which beat the Zacks Consensus Estimate of 3.18 by 5%. The bottom line also improved 14.4% year over year.
GAAP EPS was $2.42, up 3% from that reported in the year-ago period.
Revenue Details
Revenues totaled $74.2 billion, up 10.9% year over year. The top line beat the Zacks Consensus Estimate by 0.8%.
Segmental Analysis
U.S. Healthcare Solutions
Revenues in this segment totaled $67.2 billion, up 12.2% on a year-over-year basis. This improvement was due to higher volume on the back of high demand for the GLP-1 drugs for diabetes and/or weight loss during the quarter.
Segmental operating income totaled $698.3 million, up 9.9% year over year. Higher gross profit (including fees earned from the distribution of government-owned COVID-19 treatments and gross profit on sales to specialty physician practices) contributed to the upside.
International Healthcare Solutions
This segment includes Alliance Healthcare, World Courier, Innomar and Profarma Specialty.
Revenues totaled $7.1 billion, flat year over year. The top line increased 5.8% at constant currency (cc).
Operating income totaled $179.4 million, down 4.1% reportedly but up 0.8% at cc. The decline was due to higher information technology expenses in European distribution business and lower operating income at the global specialty logistics business, partially offset by the strong performance of Canadian business.
Margin Analysis
Cencora reported a gross profit of $2.4 billion, up 6.5% on a year-over-year basis. As a percentage of revenues, the gross margin was 3.25%, down 13 basis points (bps) year over year.
The company recorded an operating income of $672.5 million, flat year over year. As a percentage of revenues, the operating margin was 0.91%, which contracted 9 bps from the year-ago quarter’s number.
Financial Position
COR exited the fiscal third quarter with cash and cash equivalents worth $3.31 billion compared with $2.29 billion in the prior-quarter quarter.
Cumulative net cash used in operating activities totaled $2.48 billion compared with $2.08 billion a year ago.
Dividend Update
During the quarter, Cencora's board of directors declared a quarterly dividend of 51 cents per share, payable on Aug 26, 2024, to shareholders of record at the close of business on Aug 9, 2024.
Guidance Raised
The company raised its outlook for fiscal 2024 earnings and revenues.
Adjusted EPS is now estimated to be in the range of $13.55-$13.65 (previously $13.35-$13.55), indicating growth of 13-13.8% over the prior-year level. The Zacks Consensus Estimate for the same is currently pegged at $13.46.
Revenues are now projected to increase 12% compared with the previous guidance of 10-12%. The top line at the U.S. Healthcare Solutions segment is now expected to grow 12-13% (previously 11-13%). Revenues at the International Healthcare solutions business are now estimated to be up 4-6% (previously 4-7%).
Adjusted operating income is expected to improve 10-11% (previously 9-11%).
Operating income at the U.S. Healthcare Solutions segment is now projected to grow 11-12% (previously 10-12%). For the International Healthcare Solutions segment, the company updated its guidance to 5-7% (previously 5-8%).
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month.
VGM Scores
At this time, Cencora has a nice Growth Score of B, though it is lagging a bit on the Momentum Score front with a C. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Cencora has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Cencora belongs to the Zacks Medical Services industry. Another stock from the same industry, Elevance Health (ELV - Free Report) , has gained 3.7% over the past month. More than a month has passed since the company reported results for the quarter ended June 2024.
Elevance Health reported revenues of $43.22 billion in the last reported quarter, representing a year-over-year change of -0.4%. EPS of $10.12 for the same period compares with $9.04 a year ago.
Elevance Health is expected to post earnings of $9.71 per share for the current quarter, representing a year-over-year change of +8%. Over the last 30 days, the Zacks Consensus Estimate has changed 0%.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Elevance Health. Also, the stock has a VGM Score of C.
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Why Is Cencora (COR) Down 2.8% Since Last Earnings Report?
It has been about a month since the last earnings report for Cencora (COR - Free Report) . Shares have lost about 2.8% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Cencora due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Cencora Q3 Earnings Beat Estimates, ‘24 View Raised
Cencora reported third-quarter fiscal 2024 adjusted earnings per share of $3.34, which beat the Zacks Consensus Estimate of 3.18 by 5%. The bottom line also improved 14.4% year over year.
GAAP EPS was $2.42, up 3% from that reported in the year-ago period.
Revenue Details
Revenues totaled $74.2 billion, up 10.9% year over year. The top line beat the Zacks Consensus Estimate by 0.8%.
Segmental Analysis
U.S. Healthcare Solutions
Revenues in this segment totaled $67.2 billion, up 12.2% on a year-over-year basis. This improvement was due to higher volume on the back of high demand for the GLP-1 drugs for diabetes and/or weight loss during the quarter.
Segmental operating income totaled $698.3 million, up 9.9% year over year. Higher gross profit (including fees earned from the distribution of government-owned COVID-19 treatments and gross profit on sales to specialty physician practices) contributed to the upside.
International Healthcare Solutions
This segment includes Alliance Healthcare, World Courier, Innomar and Profarma Specialty.
Revenues totaled $7.1 billion, flat year over year. The top line increased 5.8% at constant currency (cc).
Operating income totaled $179.4 million, down 4.1% reportedly but up 0.8% at cc. The decline was due to higher information technology expenses in European distribution business and lower operating income at the global specialty logistics business, partially offset by the strong performance of Canadian business.
Margin Analysis
Cencora reported a gross profit of $2.4 billion, up 6.5% on a year-over-year basis. As a percentage of revenues, the gross margin was 3.25%, down 13 basis points (bps) year over year.
The company recorded an operating income of $672.5 million, flat year over year. As a percentage of revenues, the operating margin was 0.91%, which contracted 9 bps from the year-ago quarter’s number.
Financial Position
COR exited the fiscal third quarter with cash and cash equivalents worth $3.31 billion compared with $2.29 billion in the prior-quarter quarter.
Cumulative net cash used in operating activities totaled $2.48 billion compared with $2.08 billion a year ago.
Dividend Update
During the quarter, Cencora's board of directors declared a quarterly dividend of 51 cents per share, payable on Aug 26, 2024, to shareholders of record at the close of business on Aug 9, 2024.
Guidance Raised
The company raised its outlook for fiscal 2024 earnings and revenues.
Adjusted EPS is now estimated to be in the range of $13.55-$13.65 (previously $13.35-$13.55), indicating growth of 13-13.8% over the prior-year level. The Zacks Consensus Estimate for the same is currently pegged at $13.46.
Revenues are now projected to increase 12% compared with the previous guidance of 10-12%. The top line at the U.S. Healthcare Solutions segment is now expected to grow 12-13% (previously 11-13%). Revenues at the International Healthcare solutions business are now estimated to be up 4-6% (previously 4-7%).
Adjusted operating income is expected to improve 10-11% (previously 9-11%).
Operating income at the U.S. Healthcare Solutions segment is now projected to grow 11-12% (previously 10-12%). For the International Healthcare Solutions segment, the company updated its guidance to 5-7% (previously 5-8%).
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month.
VGM Scores
At this time, Cencora has a nice Growth Score of B, though it is lagging a bit on the Momentum Score front with a C. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Cencora has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Cencora belongs to the Zacks Medical Services industry. Another stock from the same industry, Elevance Health (ELV - Free Report) , has gained 3.7% over the past month. More than a month has passed since the company reported results for the quarter ended June 2024.
Elevance Health reported revenues of $43.22 billion in the last reported quarter, representing a year-over-year change of -0.4%. EPS of $10.12 for the same period compares with $9.04 a year ago.
Elevance Health is expected to post earnings of $9.71 per share for the current quarter, representing a year-over-year change of +8%. Over the last 30 days, the Zacks Consensus Estimate has changed 0%.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Elevance Health. Also, the stock has a VGM Score of C.