Core Insights - Albert Anthony is a Croatian-American media personality and analyst for financial platforms, focusing on dividend stocks and general market commentary [1] - He has gained over 1,000 followers since 2023 and has covered more than 200 companies across various sectors [1] - Anthony has a background in the IT sector and has worked with a top 10 financial firm in the US [1] - He plans to launch a new book in 2025 discussing his stock rating methodology [1] Company Overview - Albert Anthony & Co. is a sole proprietorship registered in Austin, Texas, and owns the Albert Anthony brand [1] - The company does not provide personalized financial advice and focuses on general market commentary based on publicly available data [1] Educational Background - Anthony holds a B.A. from Drew University and has completed coursework through the Corporate Finance Institute and Coursera [1]

Summary of Cencora (COR) 2025 Conference Call Company Overview - **Company**: Cencora (COR) - **Date of Conference**: May 13, 2025 - **Key Speakers**: Bob Mach (CEO), Jim Cleary (EVP and CFO), Bennett Murphy (SVP and Head of IR and Treasury) Industry Insights - **Industry**: Specialty Pharmaceuticals and Healthcare Distribution Key Points and Arguments Business Model and Pricing - The company has evolved its business model over the past decade, moving from a reliance on generics to a more diversified approach that includes fixed fee contracts and specialty medications [2][10] - The impact of potential changes to drug pricing, such as the MFN executive order, is uncertain, but the company believes it will not harm community providers or patient access [4][5][9] - Cencora has been proactive in Washington, advocating for providers and patient access to pharmaceuticals, which positions them favorably in discussions about pricing changes [6][7][8] Financial Performance - Cencora has experienced strong earnings growth, with a 23% increase in US operating income in the most recent quarter [18] - The company has outperformed its guidance multiple times this fiscal year, driven by strong utilization trends and sales of specialty products [15][17] - The company expects continued strong performance in 2025, with no significant changes anticipated compared to 2024 [16][20] Specialty and Health Systems - Cencora is well-positioned in the specialty market, particularly within health systems, which are increasingly setting up their own pharmacies [21][22] - The company provides consulting services to health systems to help them expand their pharmacy services, including specialty and infusion pharmacies [27][28] Generics and Inventory Management - Cencora maintains disciplined inventory levels and focuses on strong product access for customers, particularly in the generics market [31][32][33] - The company is cautious about potential tariffs on pharmaceuticals but is not significantly altering its inventory strategy [29][30] Operating Expenses and Growth Strategy - The company emphasizes operating leverage, aiming for operating expenses to grow slower than gross profit [36][37] - Cencora is focused on productivity initiatives to enhance efficiency as it continues to grow [39] Market Opportunities - Cencora is targeting organic growth in oncology and retina specialties, with a focus on attracting smaller physician practices [41][42] - The company is optimistic about the adoption of biosimilars in the physician space, which is already strong [49][50] Capital Deployment - Cencora plans to maintain balanced capital deployment, with approximately $600 million allocated for capital expenditures this year, primarily for technology and infrastructure [52][53] - The company has a strategy for opportunistic share repurchases and aims to grow dividends at a sustainable rate [54][55] Future Outlook - The leadership team is excited about the growth potential in specialty pharmaceuticals, driven by innovation and technology [56][57] - The focus on customer centricity and active engagement with stakeholders is expected to sustain the company's momentum [58][59] Additional Important Insights - The company has a long-term partnership with physicians in oncology and retina, which enhances its competitive position [45][46] - Cencora's unique understanding of the pharmaceutical supply chain allows it to advocate effectively for its stakeholders [7][8] This summary captures the essential insights and strategic directions discussed during the conference call, highlighting Cencora's positioning within the specialty pharmaceuticals industry and its proactive approach to market challenges.

Cencora, Inc. (COR) reported second-quarter fiscal 2025 adjusted earnings per share (EPS) of $4.42, which beat the Zacks Consensus Estimate of $4.08 by 8.3%. The bottom line also improved 16.3% year over year.GAAP EPS was $3.68, up 76.1% from the year-ago period’s level. The significant gain was primarily driven by robust top-line growth. (Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.)Revenue DetailsRevenues totaled $75.45 billion, up 10.3% year over year. The top line beat the Z ...

Core Insights - Cencora, Inc reported a 10.3% increase in second-quarter 2025 sales to $75.5 billion, slightly missing the consensus estimate of $75.68 billion, primarily driven by an 11.4% revenue increase in the U.S. Healthcare Solutions segment [1] Financial Performance - U.S. Healthcare Solutions revenue reached $68.3 billion, attributed to market growth driven by unit volume increases, particularly in diabetes and weight loss products in the GLP-1 class, as well as specialty products sold to physician practices and health systems [2] - Adjusted EPS for the quarter was $4.42, reflecting a 16.3% year-over-year increase, surpassing the consensus estimate of $4.11 [2] - Adjusted gross profit for the second quarter was $2.9 billion, a 15.2% increase year-over-year, mainly due to growth in the U.S. Healthcare Solutions segment, although partially offset by a decline in the International Healthcare Solutions segment [3] - Adjusted gross profit margin improved to 3.86%, up 16 basis points, while adjusted operating income rose to $1.2 billion, a 15.3% increase, driven by the U.S. Healthcare Solutions segment [4] Guidance and Outlook - Cencora updated its fiscal year 2025 financial guidance, projecting adjusted diluted EPS between $15.70 and $15.95, an increase from the previous range of $15.30 to $15.60, compared to the consensus of $15.46 [5] - Revenue growth for the International Healthcare Solutions segment is now expected to be between 3% and 4%, down from the previous estimate of 4% to 5% [5] - Adjusted consolidated operating income growth is anticipated to be between 13.5% and 15.5%, an increase from the prior range of 11.5% to 13.5% [6]

Revenue Growth - Revenue increased by $7.0 billion, or 10.3%, and $16.3 billion, or 11.6%, from the prior year quarter and six-month period, primarily due to growth in the U.S. Healthcare Solutions segment[95] - The U.S. Healthcare Solutions segment grew its revenue by $7.0 billion, or 11.4%, and $15.8 billion, or 12.5%, from the prior year quarter and six-month period, driven by increased sales of GLP-1 products of $2.2 billion, or 36.1%, and $5.4 billion, or 44.5%[96] - International Healthcare Solutions' revenue increased by $0.1 billion, or 0.7%, and $0.4 billion, or 3.1%, from the prior year quarter and six-month period, primarily due to increased sales in Europe and Canada[97] Profit and Operating Income - Gross profit increased by $521.8 million, or 20.6%, and $611.0 million, or 12.2%, from the prior year quarter and six-month period, primarily due to increases in the U.S. Healthcare Solutions segment[99] - U.S. Healthcare Solutions' gross profit increased by $441.7 million, or 26.3%, and $555.5 million, or 17.1%, from the prior year quarter and six-month period, with gross profit margins of 3.11% and 2.67%[100] - U.S. Healthcare Solutions operating income rose by 22.8% to $1,033,150 for the three months ended March 31, 2025, and by 17.0% to $1,800,494 for the six months ended March 31, 2025[112] - International Healthcare Solutions operating income decreased by 17.3% to $159,301 for the three months ended March 31, 2025, and by 10.2% to $341,394 for the six months ended March 31, 2025[113] Expenses and Acquisitions - Total operating expenses increased by $38.9 million, or 2.0%, and $244.7 million, or 6.7%, from the prior year quarter and six-month period, primarily due to the January 2025 acquisition of Retina Consultants of America (RCA)[93] - Total operating expenses increased by 2.0% to $2,023,619 for the three months ended March 31, 2025, and by 6.7% to $3,875,403 for the six months ended March 31, 2025, primarily due to the acquisition of RCA[105] - Acquisition-related deal and integration expenses were $99,380 for the three months ended March 31, 2025, primarily related to the RCA acquisition[108] - The acquisition of RCA for $4,036.1 million in cash is expected to broaden relationships with community providers and enhance leadership in specialty pharmaceuticals[92] Cash Flow and Financing - Cash generated from operations for the six months ended March 31, 2025, was $632.5 million, a significant increase of $625.7 million compared to $6.7 million for the same period in 2024[122] - The company generated sufficient capital resources to finance working capital, acquisitions, and debt repayment through operating cash flows and credit availability[118] - Net cash provided by financing activities for the six months ended March 31, 2025, included $1.8 billion from senior notes issuance and $1.5 billion from term loan borrowings for the RCA acquisition[129] Tax and Interest - The effective tax rates were 22.7% and 21.8% for the three and six months ended March 31, 2025, respectively, higher than the U.S. statutory rate primarily due to U.S. state income taxes[93] - Effective tax rates were 22.7% and 21.8% for the three and six months ended March 31, 2025, respectively, compared to 9.8% and 18.1% for the same periods in 2024[117] - Interest expense, net increased by 62.2% to $103,988 for the three months ended March 31, 2025, primarily due to the issuance of $1.8 billion in senior notes and a $1.5 billion variable-rate term loan[115] Shareholder Returns - In March 2024, the Board of Directors authorized a share repurchase program allowing the company to purchase up to $2.0 billion of outstanding shares, with $435.4 million repurchased in the six months ended March 31, 2025, leaving $882.2 million available under the program[141] - The quarterly dividend was increased by 8% from $0.51 to $0.55 per share in November 2024, with future dividends dependent on earnings and financial conditions[142] Debt and Obligations - The total debt as of March 31, 2025, was $7.86 billion, with $5.35 billion available under various credit facilities[132] - Total contractual obligations for future principal and interest payments on debt, operating leases, and other commitments amount to $12.42 billion as of March 31, 2025[144] - The company had cumulative intra-period borrowings of $42.9 billion during the six months ended March 31, 2025, compared to $47.9 billion in the same period of 2024[121] Foreign Operations and Risks - Revenue from foreign operations accounted for approximately 9% of consolidated revenue during the six months ended March 31, 2025[146] - The company has exposure to foreign currency risk, primarily with the U.K. Pound Sterling, Euro, Turkish Lira, Brazilian Real, and Canadian Dollar[146] - The financial impact of geopolitical conflicts, such as those in Ukraine and Israel, has not been material to the company's operations[151] Inflation and Economic Conditions - Elevated inflation levels have impacted operating expenses, with potential adverse effects on operations and financial results if inflation persists[150] - Cash and cash equivalents stood at $2.0 billion as of March 31, 2025, with a potential increase in annual net interest expense of $0.1 million for every 10-basis point decrease in interest rates on excess cash[148]

Financial Data and Key Metrics Changes - The company reported consolidated revenue of $75.5 billion, an increase of 10% year-over-year, primarily driven by growth in the U.S. Healthcare Solutions segment [20][21] - Adjusted diluted EPS grew by 16%, prompting the company to raise its full-year guidance for adjusted operating income and EPS [5][31] - Consolidated gross profit was $2.9 billion, up 15%, with a gross profit margin of 3.86%, reflecting a 16 basis point increase [21][22] Business Line Data and Key Metrics Changes - U.S. Healthcare Solutions segment revenue was $68.3 billion, up 11%, with significant growth in GLP-1 products, which increased by $2.2 billion or 36% year-over-year [26][27] - International Healthcare Solutions segment revenue was $7.2 billion, up approximately 1% on an as-reported basis, but down 17% in operating income due to market softness [29][30] Market Data and Key Metrics Changes - The U.S. segment's growth was attributed to strong utilization trends and sales of specialty products, while the international segment faced challenges due to subdued clinical trial activity [28][29] - The company noted that clinical trial activity has been slower than expected, impacting the global specialty logistics business [74][75] Company Strategy and Development Direction - The company is focused on expanding its capabilities in specialty medications and enhancing partnerships with pharmaceutical manufacturers [14][15] - The integration of the RCA acquisition is expected to strengthen the company's position in the specialty market and improve service offerings [32][66] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's positioning within the growing pharmaceutical market, particularly in specialty medications [43][44] - The company anticipates continued growth driven by strong performance in the U.S. segment, despite challenges in the international market [16][31] Other Important Information - The company ended the quarter with a cash balance of $2 billion and expects full-year adjusted free cash flow to be between $2 billion and $3 billion [25] - The effective income tax rate for the quarter was 20.8%, with expectations for the full year to be slightly below 21% [24] Q&A Session Summary Question: Strength in U.S. Healthcare business and long-term drivers - Management highlighted three key drivers for long-term performance: positioning in the specialty market, strong relationships with providers, and a committed team focused on innovation [41][46] Question: Specialty growth contributors - Management noted that growth in specialty is driven by organic growth from core distribution, utilization trends, and the recent acquisition of RCA [49][52] Question: Impact of tariffs on business - Management stated that there have been no material impacts from tariffs on their business, emphasizing their focus on ensuring patient access to medications [58][61] Question: RCA impact on gross margin - RCA's integration is expected to positively impact gross profit margins due to its higher margin business compared to core distribution [63][66] Question: International segment softness - Management acknowledged subdued clinical trial activity affecting the International Healthcare Solutions segment and indicated a slower-than-expected rebound [72][74] Question: MSO operations and profit streams - Management expressed confidence in the income streams from MSO operations, highlighting the potential for growth in clinical trial services [77][79] Question: Clinical trial activity fragmentation - Management confirmed that the decline in clinical trial activity is a market-wide phenomenon, not limited to specific customers [81][84]

Core Insights - Cencora reported quarterly earnings of $4.42 per share, exceeding the Zacks Consensus Estimate of $4.08 per share, and up from $3.80 per share a year ago, representing an earnings surprise of 8.33% [1] - The company achieved revenues of $75.45 billion for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 0.85% and increasing from $68.41 billion year-over-year [2] - Cencora has consistently outperformed consensus EPS and revenue estimates over the last four quarters [2] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $3.80 on revenues of $80.95 billion, and for the current fiscal year, it is $15.37 on revenues of $317.7 billion [7] - The trend of estimate revisions for Cencora is favorable, contributing 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 top 27% of over 250 Zacks industries, suggesting a positive outlook for stocks within this sector [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Cencora, Inc. Second Quarter Fiscal 2025 Earnings Call 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," "potential," "predict ...

Revenue Performance - Revenue for the second quarter of fiscal 2025 was $75.5 billion, representing a 10.3 percent increase year-over-year, primarily driven by an 11.4 percent increase in the U.S. Healthcare Solutions segment[1][5] - Revenue for the three months ended March 31, 2025, was $75,453,673, representing a 10.3% increase from $68,414,307 in the same period of 2024[25] - Revenue for the six months ended March 31, 2025, was $156,940,733, an 11.6% increase from $140,667,140 in the same period of 2024[28] - U.S. Healthcare Solutions revenue was $68.3 billion, up 11.4 percent year-over-year, driven by unit volume growth in diabetes and weight loss products[9][11] - International Healthcare Solutions revenue was $7.2 billion, a 0.7 percent increase year-over-year, with segment operating income decreasing by 17.3 percent[11] - U.S. Healthcare Solutions revenue increased by 12.5% to $142,316,959, while International Healthcare Solutions revenue grew by 3.1% to $14,630,897[45] Earnings and Profitability - GAAP diluted EPS for the second quarter was $3.68, a 76.1 percent increase from $2.09 in the prior year, while adjusted diluted EPS rose 16.3 percent to $4.42[1][5] - Adjusted diluted EPS guidance for fiscal 2025 has been raised to a range of $15.70 to $15.95, up from the previous range of $15.30 to $15.60[2][16] - Gross profit for the second quarter was $3.1 billion, a 20.6 percent increase year-over-year, with gross profit margin as a percentage of revenue increasing by 35 basis points to 4.06 percent[4][5] - Operating income for the second quarter was $1.0 billion, an increase of 87.3 percent compared to the same period in the previous fiscal year[5][10] - Net income attributable to Cencora, Inc. for the three months ended March 31, 2025, was $717,871, a 70.6% increase from $420,775 in the prior year[25] - Operating income for the six months ended March 31, 2025, was $1,742,444, a 26.6% increase from $1,376,134 in 2024[45] Expenses and Costs - Total operating expenses for the three months ended March 31, 2025, were $2,023,619, a 2.0% increase from $1,984,764 in the same period of 2024[25] - The company recorded $37.5 million of expense adjustments related to the acquisition of RCA in the three months ended March 31, 2025[25] - The company incurred $225,985 thousand in litigation and opioid-related expenses during the three months ended March 31, 2024[34] - The company incurred $3,947,761 in costs related to acquired companies during the six months ended March 31, 2025[49] Cash Flow and Financial Position - Net cash provided by operating activities for the six months ended March 31, 2025, was $632,456, compared to $6,714 in 2024[49] - Cash and cash equivalents decreased to $1,978,061 as of March 31, 2025, from $3,132,648 as of September 30, 2024[47] - Long-term debt increased to $7,085,886 as of March 31, 2025, from $3,811,745 as of September 30, 2024[47] Tax and Dividends - The effective tax rate for the second quarter was 22.7 percent, compared to 9.8 percent in the prior year quarter[5][10] - The company declared a quarterly cash dividend of $0.55 per common share, payable on June 2, 2025[16] Foreign Currency Impact - For Q2 fiscal 2025, revenue was $75.5 billion, with a negative impact from foreign currency translation of $357.7 million, resulting in constant currency revenue of $75.8 billion[54] - Adjusted operating income for Q2 fiscal 2025 was $1,192.3 million, negatively impacted by foreign currency translation of $6.6 million, leading to a constant currency adjusted operating income of $1,198.9 million[54] - For the six months ended March 31, 2025, total revenue was $156.9 billion, with a negative impact from foreign currency translation of $574.4 million, resulting in constant currency revenue of $157.5 billion[54] - In the International Healthcare Solutions segment for Q2 fiscal 2025, revenue was $7.2 billion, negatively impacted by foreign currency translation of $357.7 million, resulting in constant currency revenue of $7.5 billion[54] - Operating income in the International Healthcare Solutions segment for Q2 fiscal 2025 was $159.3 million, with a negative impact from foreign currency translation of $6.6 million, leading to constant currency operating income of $165.9 million[54] Adjusted Metrics - Adjusted free cash flow for the six months ended March 31, 2025, was $176.0 million, derived from net cash provided by operating activities of $632.5 million minus capital expenditures of $235.0 million[56] - Adjusted net income attributable to the Company is a non-GAAP measure that excludes unusual, non-operating items[56] - The Company does not provide forward-looking guidance on a GAAP basis for certain metrics due to the unpredictability of future financial information[55] - Adjusted diluted earnings per share excludes impacts from various unusual and non-recurring items, providing a clearer view of ongoing operating performance[56] - The adjusted effective tax rate is calculated by dividing adjusted income tax expense by adjusted income before income taxes, excluding unusual items[56]

Industry Overview - The medical device sector experienced steady sales growth in Q1 2025, driven by innovations in AI, wearables, and personalized care, despite modest earnings gains due to global tariffs, inflation, and supply chain disruptions [1][2] - Earnings in the medical sector increased by 4.7% year over year, with revenues rising by 9.4% [1] - The sector's earnings are expected to improve by 40% and sales by 8.3% compared to Q4 2024 [3] Technological Innovations - The medical device industry saw strong momentum from technological advancements, particularly in AI and digital health solutions, enhancing clinical accuracy and patient outcomes [4] - Wearable devices, such as continuous glucose monitors and smartwatches, are expanding in preventive care and remote monitoring [4] - The Internet of Medical Things (IoMT) is facilitating real-time patient data collection and predictive analytics, improving hospital operations and personalized treatment [4] Economic Challenges - The industry is facing operational and financial headwinds due to rising raw material costs, labor-supply constraints, and supply chain disruptions [2][5] - The U.S. administration's 10% baseline tariff on imports is projected to significantly impact major players, with GE Healthcare estimating a $500 million cost hit for 2025 [5] - Companies are reconfiguring manufacturing and sourcing strategies, diversifying supplier networks, and investing in domestic production to mitigate these challenges [6] Company Performance Insights - Cencora is expected to report a 14% revenue growth to $74 billion, driven by strong demand for specialty distribution and GLP-1 drugs, despite a decline in COVID-19 vaccine sales [8] - QuidelOrtho is facing challenges in the respiratory segment, with a 4% decrease in year-over-year revenues, but strong demand in specialty diagnostics may offset some declines [11][13] - Inogen anticipates modest growth with revenues projected between $79 million and $81 million, primarily from B2B sales, while DTC sales are expected to decline by approximately 21% [15][16] Strategic Developments - Inogen's strategic partnership with Yuwell Medical, including a $27.2 million investment, aims to expand its presence in the Chinese market for respiratory devices [17] - Companies are adopting a "think globally, act locally" approach to align manufacturing and sales geographies more closely [6]