Core Viewpoint - Growth stocks are appealing due to their potential for above-average financial growth, but identifying strong candidates can be challenging due to inherent risks and volatility [1] Group 1: Company Overview - Cencora (COR) is identified as a promising growth stock, supported by a favorable Growth Score and a top Zacks Rank [2] - The company has a historical EPS growth rate of 14.7%, with projected EPS growth of 11.1% this year, surpassing the industry average of 11% [4] Group 2: Financial Metrics - Cencora's year-over-year cash flow growth stands at 12.9%, significantly higher than the industry average of -10.5% [5] - The company's annualized cash flow growth rate over the past 3-5 years is 14.1%, compared to the industry average of 13.4% [6] Group 3: Earnings Estimates - There is a positive trend in earnings estimate revisions for Cencora, with the current-year earnings estimates increasing by 0.3% over the past month [7] - Cencora has achieved a Growth Score of B and a Zacks Rank of 2, indicating strong potential for outperformance [9]

Group 1 - Concentra Group (CON) has gained approximately 15.8% year-to-date, outperforming the average return of 6.3% for the Medical sector [4] - The Zacks Rank for Concentra Group is currently 2 (Buy), indicating a positive outlook based on earnings estimates and revisions [3] - The Zacks Consensus Estimate for CON's full-year earnings has increased by 5.4% over the past quarter, reflecting stronger analyst sentiment [3] Group 2 - Concentra Group is part of the Medical Services industry, which consists of 59 companies and currently ranks 84 in the Zacks Industry Rank [5] - The Medical Services industry has seen an average gain of 4.3% year-to-date, indicating that Concentra Group is performing better than its industry peers [5] - Another stock in the Medical sector, Cencora (COR), has also outperformed the sector with a year-to-date return of 11.6% [4]

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Core Viewpoint - Walgreens Boots Alliance has sold additional shares of drug distributor Cencora for approximately $300 million, primarily aimed at debt reduction and general corporate purposes [1] Group 1: Financial Actions - The stock sale reduces Walgreens' stake in Cencora from 10% to 6% [2] - This sale follows the suspension of quarterly dividend payments to stockholders for the first time in nearly a century, as the company seeks to free up cash for a broader long-term turnaround [3] - Walgreens has been reducing its stake in Cencora and other businesses over the past four years to raise funds for priorities such as establishing a new specialty pharmacy business and enhancing healthcare services in its stores [4] Group 2: Transaction Details - The announcement included the sale of 1.3 million shares of Cencora, which were pledged under prepaid variable share forward transactions, resulting in approximately $300 million from the early settlement and concurrent sale of shares [5] - The proceeds from these transactions, along with the recent suspension of the dividend, are intended to help the company address upcoming debt maturities in fiscal 2026 [5] Group 3: Strategic Relationship - Despite the reduction in stake, Walgreens maintains that the sale does not affect the long-term partnership with Cencora, which has been a trusted partner since 2013 [5] - The Chief Operating Officer, International of Walgreens Boots Alliance, Ornella Barra, will continue to serve on Cencora's Board of Directors [5]

Revenue Growth - Revenue increased by $9.2 billion, or 12.8%, from the prior year quarter, primarily due to growth in the U.S. Healthcare Solutions segment [90]. - U.S. Healthcare Solutions segment revenue grew by $8.8 billion, or 13.6%, driven by unit volume growth, including a $3.2 billion increase, or 53.0%, in sales of GLP-1 products [93]. - International Healthcare Solutions revenue increased by $0.4 billion, or 5.5%, primarily due to increased sales of $0.3 billion in Europe and $0.1 billion in Canada [94]. Profit and Operating Income - Gross profit increased by $89.2 million, or 3.6%, from the prior year quarter, with U.S. Healthcare Solutions gross profit rising by $113.8 million, or 7.2% [90]. - Total segment operating income increased by $63.6 million, or 7.2%, with U.S. Healthcare Solutions operating income up by $69.2 million, or 9.9% [90]. - U.S. Healthcare Solutions' operating income increased by $69.2 million, or 9.9%, to $767.3 million, while International Healthcare Solutions' operating income decreased by $5.5 million, or 2.9%, to $182.1 million [108][109]. - Total segment operating income rose to $949.3 million, a 7.2% increase from the previous year [108]. - Operating income decreased by $116.6 million, or 14.2%, to $706.3 million due to increased operating expenses and litigation-related costs [108]. Expenses - Total operating expenses increased by $205.8 million, or 12.5%, primarily due to litigation and opioid-related expenses [90]. - Distribution, selling, and administrative expenses increased by $73.3 million, or 5.2%, compared to the prior year quarter [103]. - Restructuring and other expenses totaled $45.8 million, reflecting workforce reductions and business transformation efforts [106]. Tax and Liabilities - The effective tax rate for the three months ended December 31, 2024, was 20.4%, lower than the 23.0% rate for the same period in 2023 [90]. - The effective tax rate decreased to 20.4% from 23.0% year-over-year, primarily due to benefits from income taxed at lower rates [112]. - The accrued litigation liability related to the Distributor Settlement Agreement is $4.8 billion, expected to be paid over the next 14 years, with $509.3 million anticipated to be paid before December 31, 2025 [139]. - The company has a liability for uncertain tax positions of $553.2 million as of December 31, 2024, primarily related to litigation concerning prescription opioid distribution [141]. Cash Flow and Financing - Cash used in operations was $2.7 billion, a decrease of $3.6 billion compared to the previous year, primarily due to increased accounts receivable and inventories [118]. - Net cash provided by financing activities included $2.0 billion of net borrowings under revolving credit facilities and $1.8 billion from senior notes issuance [124]. - Total debt as of December 31, 2024, was $8.1 billion, with $2.4 billion available under the multi-currency revolving credit facility [127]. - The company has a $1,450 million receivables securitization facility, expiring in October 2027, with a potential increase of up to $250 million for seasonal needs [129]. - As of December 31, 2024, there were $350 million of borrowings outstanding under the receivables securitization facility, with none outstanding as of September 30, 2024 [130]. - In November 2024, the company obtained a $1.5 billion senior unsecured term facility to finance a portion of the acquisition of RCA, maturing in three years [131]. - The company issued $500 million of 4.625% senior notes due in December 2027, $600 million of 4.850% senior notes due in December 2029, and $700 million of 5.150% senior notes due in February 2035 [134]. - The company had $2.1 billion of variable-rate debt outstanding as of December 31, 2024, managing interest rate risk through a combination of fixed-rate and variable-rate debt [143]. Capital Expenditures and Investments - Capital expenditures increased to $105.9 million from $74.2 million, with significant investments in distribution network expansion and technology initiatives [122]. - The company expects to invest approximately $600 million in capital expenditures during fiscal 2025 [123]. Shareholder Returns - The company authorized a share repurchase program of up to $2.0 billion, with $385.4 million of common stock purchased in the three months ended December 31, 2024 [137]. - The quarterly dividend was increased by 8% from $0.51 to $0.55 per share, with future dividends dependent on earnings and financial condition [138]. Foreign Operations - Revenue from foreign operations during the three months ended December 31, 2024, was approximately 9% of consolidated revenue [142].

Core Viewpoint - Cencora, Inc. reported strong first-quarter fiscal 2025 results, with adjusted earnings per share (EPS) exceeding estimates and revenue growth driven by U.S. Healthcare Solutions and specialty products [1][3][14]. Financial Performance - Adjusted EPS for Q1 fiscal 2025 was $3.73, beating the Zacks Consensus Estimate of $3.50 by 6.6% and improving 13.7% year over year [1]. - GAAP EPS was $2.50, down 16.1% from the previous year, primarily due to the absence of a $78.9 million credit related to litigation and opioid expenses recorded in the prior quarter [1]. - Total revenues reached $81.49 billion, reflecting a 12.8% year-over-year increase and surpassing the Zacks Consensus Estimate by 4.3% [3]. Segmental Analysis - **U.S. Healthcare Solutions**: Revenues totaled $74 billion, up 13.6% year over year, driven by increased unit volume and sales of GLP-1 drugs and specialty products [4]. - **International Healthcare Solutions**: Revenues amounted to $7.5 billion, a 5.5% year-over-year increase, with operating income at $182.1 million, down 2.9% on a reported basis but up 3.3% at constant currency [6]. Margin Analysis - Adjusted gross profit was $2.5 billion, up 6.1% year over year, with an adjusted gross margin of 3.1%, down 20 basis points from the previous year [7]. - Adjusted operating income was $949.3 million, up 7.2% year over year, with an adjusted operating margin of 1.2%, contracting 7 basis points from the year-ago quarter [7]. Financial Update - Cencora ended the fiscal first quarter with cash and cash equivalents of $3.22 billion, an increase from $3.13 billion in the previous quarter [8]. - Cumulative net cash used in operating activities was $2.72 billion, compared to $885.2 million in net cash provided by operating activities a year ago [8]. Dividend Update - The board declared a quarterly dividend of 55 cents per share, payable on March 3, 2025, to shareholders of record as of February 14, 2025 [10]. FY25 Guidance - The company updated its fiscal 2025 earnings and revenue outlook, projecting adjusted EPS in the range of $15.15-$15.45, indicating growth of 8-10% from the prior year [11]. - Revenue growth is now expected to be 8-10%, up from the previous guidance of 7-9%, with U.S. Healthcare Solutions projected to grow 9-11% [12]. - Adjusted operating income is anticipated to improve by 11.5-13.5%, up from earlier guidance of 5-6.5% [12][13]. Market Performance - Following the robust quarterly results, Cencora's shares increased by 0.8%, with a 4.9% gain over the past six months, contrasting with a 12.8% decline in the industry [14].

Financial Data and Key Metrics Changes - Cencora reported a revenue growth of 13% in Q1 2025, reaching $81.5 billion, primarily driven by strong performance in the U.S. healthcare solutions segment [22][8] - Adjusted diluted EPS increased by 14% to $3.73, prompting the company to raise its full-year adjusted diluted EPS guidance to a range of $15.25 to $15.55 [21][32] - Consolidated gross profit was $2.5 billion, up 6%, with a gross profit margin of 3.11%, a decrease of 20 basis points due to increased sales of low-margin GLP-1 products [23][24] Business Line Data and Key Metrics Changes - U.S. healthcare solutions segment revenue was $74 billion, up 14%, with GLP-1 product sales increasing by 53% year-over-year [26][27] - International healthcare solutions segment revenue was $7.5 billion, up approximately 6% on an as-reported basis and nearly 9% on a constant currency basis [28] Market Data and Key Metrics Changes - The company experienced strong prescription utilization trends in the U.S. healthcare solutions segment, contributing to overall revenue growth [21][26] - The international healthcare solutions segment's operating income was $182 million, down 3% on an as-reported basis, but up 3% on a constant currency basis [28] Company Strategy and Development Direction - Cencora is focused on advancing its leadership in specialty healthcare, enhancing efficiency through technology, and maintaining a customer-centric approach [10][15] - The acquisition of Retina Consultants of America (RCA) is part of the strategy to expand leadership in specialty healthcare and support community providers [12][19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to capitalize on positive industry trends and innovation, with a focus on driving value for stakeholders [19][39] - The company anticipates a challenging second quarter due to COVID-19 vaccine headwinds and expects to see improved performance in the international segment later in fiscal 2025 [38][62] Other Important Information - The company used $2.7 billion in cash during the quarter, resulting in negative adjusted free cash flow of $2.8 billion, but expects full-year adjusted free cash flow to be in the range of $2 billion to $3 billion [25][30] - Cencora's capital allocation strategy prioritizes deleveraging following the RCA acquisition [25] Q&A Session Summary Question: Strategic positioning in specialty business - Management emphasized a pharmaceutical-centered strategy and the importance of a strong customer portfolio to drive growth in specialty healthcare [44][46] Question: Revenue guidance and potential deceleration - Management noted that the revenue growth guidance reflects assumptions about GLP-1 growth and the impact of Humira's conversion to biosimilars [52][54] Question: World Courier business performance - Management acknowledged a challenging quarter for the World Courier business due to subdued clinical trial activity but expects improvement later in fiscal 2025 [61][62] Question: Update on Walgreens contract discussions - Management confirmed ongoing engagement with Walgreens to create value and that guidance includes assumptions regarding the contract [71][73] Question: MSO business challenges and physician enablement - Management highlighted the importance of physician leadership and value creation in the MSO model [77][79] Question: Competitive environment in ophthalmology MSO space - Management expressed confidence in RCA's leadership position and the ability to attract physicians and practices [83][84] Question: Guidance revision for U.S. business on an organic basis - Management indicated that the U.S. segment's performance is above initial guidance, driven by strong utilization trends [88] Question: COVID headwind impact - Management confirmed that the COVID-related headwind was as expected, with no significant contribution from exclusive COVID therapies in the current year [120]

For the quarter ended December 2024, Cencora (COR) reported revenue of $81.49 billion, up 12.8% over the same period last year. EPS came in at $3.73, compared to $3.28 in the year-ago quarter.The reported revenue compares to the Zacks Consensus Estimate of $78.12 billion, representing a surprise of +4.31%. The company delivered an EPS surprise of +6.57%, with the consensus EPS estimate being $3.50.While investors scrutinize revenue and earnings changes year-over-year and how they compare with Wall Street ex ...

Core Insights - Cencora reported quarterly earnings of $3.73 per share, exceeding the Zacks Consensus Estimate of $3.50 per share, and showing an increase from $3.28 per share a year ago, resulting in an earnings surprise of 6.57% [1] - The company achieved revenues of $81.49 billion for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 4.31% and up from $72.25 billion year-over-year [2] - Cencora's stock has increased approximately 12% since the beginning of the year, outperforming the S&P 500's gain of 2.7% [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $4.25 on revenues of $75 billion, while for the current fiscal year, the estimate is $15.14 on revenues of $320.36 billion [7] - The estimate revisions trend for Cencora is favorable, leading to a Zacks Rank 2 (Buy) for the stock, indicating expected outperformance in the near future [6] Industry Context - The Medical Services industry, to which Cencora belongs, is currently ranked in the bottom 30% of over 250 Zacks industries, which may impact stock performance [8] - Medpace, another company in the same industry, is expected to report quarterly earnings of $2.97 per share, reflecting a year-over-year increase of 20.7%, with revenues projected at $536.37 million, up 7.6% from the previous year [9][10]

February 5, 2025 Cautionary Note Regarding Forward Looking Statements Certain of the statements contained in this presentation are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the "Securities Exchange Act"). Words such as "aim," "anticipate," "believe," "can," "continue," "could," "estimate," "expect," "intend," "may," "might," "on track," "opportunity," "plan," "possible," "poten ...