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]

Cencora (COR) is slated to report second-quarter fiscal 2025 results on May 7, before market open. In the last reported quarter, the company delivered an earnings surprise of 6.57%. COR's earnings beat estimates in each of the trailing four quarters, delivering an average surprise of 4.94%.(Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.) Q2 Estimates The Zacks Consensus Estimate for revenues is pegged at $74.82 billion, up 9.4% from the prior-year quarter's level. The consensus ma ...

Core Viewpoint - Cencora (COR) is expected to report quarterly earnings of $4.08 per share, reflecting a 7.4% increase year-over-year, with revenues projected at $74.82 billion, indicating a 9.4% growth compared to the previous year [1]. Earnings Projections - The consensus EPS estimate has been revised upward by 0.2% in the last 30 days, showcasing analysts' reassessment of their initial projections [2]. - Changes in earnings projections are crucial for predicting investor reactions, as empirical studies show a strong correlation between earnings estimate trends and short-term stock price movements [3]. Revenue Estimates - Analysts estimate 'Revenue- Total International Healthcare Solutions' at $7.36 billion, a year-over-year increase of 3.3% [5]. - The consensus for 'Revenue- Total U.S. Healthcare Solutions' is $67.56 billion, reflecting a 10.2% increase from the same quarter last year [5]. - 'Revenue- International Healthcare Solutions- Alliance Healthcare' is projected to reach $5.98 billion, indicating a 3.9% year-over-year change [6]. - 'Revenue- U.S. Healthcare Solutions- Animal Health' is expected to be $1.49 billion, suggesting a 14.1% increase year-over-year [6]. - 'Revenue- U.S. Healthcare Solutions- Human Health' is forecasted at $65.56 billion, reflecting a 9.3% year-over-year growth [6]. - 'Revenue- International Healthcare Solutions- Other Healthcare Solutions' is estimated at $1.42 billion, indicating a 3.8% increase from the previous year [7]. Operating Income Estimates - Analysts project 'Operating income- Non-GAAP- International Healthcare Solutions' to be $182.43 million, down from $192.72 million reported in the same quarter last year [7]. - 'Operating income- Non-GAAP- U.S. Healthcare Solutions' is expected to reach $926.36 million, compared to $841.06 million from the previous year [8]. Stock Performance - Over the past month, Cencora shares have returned +0.4%, outperforming the Zacks S&P 500 composite, which recorded a -0.5% change [8].

Core Viewpoint - Cencora (COR) is anticipated to report a year-over-year increase in earnings driven by higher revenues, with the actual results being a significant factor influencing its near-term stock price [1][2]. Earnings Expectations - The earnings report is scheduled for May 7, 2025, with expectations of quarterly earnings at $4.08 per share, reflecting a +7.4% change year-over-year, and revenues projected at $74.82 billion, up 9.4% from the previous year [3][2]. Estimate Revisions - The consensus EPS estimate has been revised 0.22% higher in the last 30 days, indicating a collective reassessment by analysts [4]. - The Most Accurate Estimate for Cencora is higher than the Zacks Consensus Estimate, resulting in a positive Earnings ESP of +0.82% [10][11]. Earnings Surprise Prediction - The Zacks Earnings ESP model suggests that a positive Earnings ESP reading is a strong predictor of an earnings beat, especially when combined with a Zacks Rank of 1 (Strong Buy), 2 (Buy), or 3 (Hold) [8]. - Cencora currently holds a Zacks Rank of 2, indicating a high likelihood of beating the consensus EPS estimate [11]. Historical Performance - Cencora has consistently beaten consensus EPS estimates, achieving this in the last four quarters, including a +6.57% surprise in the most recent quarter [12][13]. Conclusion - Cencora is positioned as a compelling candidate for an earnings beat, but investors should consider other influencing factors beyond earnings expectations [16].

Company Performance - Cencora (COR) has returned 27.6% year-to-date, significantly outperforming the Medical group, which has lost about 5.6% on average [4] - Cencora currently holds a Zacks Rank of 2 (Buy), indicating a positive earnings outlook [3] - Over the past 90 days, the Zacks Consensus Estimate for Cencora's full-year earnings has increased by 0.1%, reflecting improving analyst sentiment [3] Industry Context - Cencora is part of the Medical Services industry, which consists of 58 stocks and is currently ranked 86 in the Zacks Industry Rank, with an average loss of 3% this year [5] - In comparison, Intensity Therapeutics Inc. (INTS), another outperforming stock in the Medical sector, has returned 5.1% year-to-date and belongs to the Medical - Biomedical and Genetics industry, which has seen a decline of 7.7% [4][6] - The Medical group includes 1002 companies and is currently ranked 3 in the Zacks Sector Rank, which evaluates the average Zacks Rank of individual stocks within the sector [2]

Trade Policy Impact - The United States has implemented new tariffs, with a 10% baseline tariff on most imports and up to 145% on Chinese goods, significantly affecting global trade dynamics [1] - The elimination of the "de minimis" exemption for shipments under $800 impacts low-cost Chinese e-commerce platforms like Temu and Shein [1] - China has responded by suspending exports of critical minerals, escalating the trade conflict and increasing uncertainty in global markets [1] Economic Consequences - Previous tariffs from 2018 to 2020 resulted in over $80 billion in additional costs for American businesses and consumers, raising concerns about price increases and margin compression across industries [2] - The reintroduction of tariffs in 2025 has raised alarms in the corporate sector, particularly regarding the implementation timeline and potential retaliatory measures from trade partners like China [2] Pharmaceutical Sector - The U.S. government is preparing to impose tariffs on select pharmaceutical imports from countries like China and India, raising concerns about increased costs and supply chain disruptions [3] - Pharmaceutical companies, reliant on international manufacturing, are particularly vulnerable to trade disruptions, leading to a cautious sentiment in the industry [3] Medical Device Sector - The medical device sector is identified as a strong investment opportunity, driven by technological advancements, demographic trends, and increasing demand for healthcare solutions [4] - The global medical devices market was valued at $518.46 billion in 2023 and is projected to grow to over $886.80 billion by 2032, with a CAGR of 6.3% [5] Investment Opportunities - Amid tariff uncertainties, investors are focusing on undervalued stocks with strong balance sheets and resilient performance, particularly in the medical device sector [6] - Promising undervalued stocks for 2025 include Cencora, Inc. (COR), Hims & Hers Health (HIMS), and Prestige Consumer (PBH) [6] Cencora, Inc. - Cencora is a major pharmaceutical services company with a diverse portfolio, including biologics and complex injectables [7] - The company has launched Accelerate Pharmacy Solutions to optimize operations for healthcare customers and has acquired Retina Consultants of America to enhance its specialty leadership [8] - Cencora's stock trades at a P/S ratio of 0.17, lower than the Medical Services market's 0.40, with an expected 11.6% growth in 2025 earnings [9] Hims & Hers Health - Hims & Hers Health offers subscription-based telehealth services and aims to simplify healthcare through a digital-first platform [10] - The company has a P/S ratio of 2.47, discounted compared to the industry's 4.03, with a projected 58% growth in 2025 earnings [11] Prestige Consumer - Prestige Consumer provides over-the-counter healthcare products and has a strong presence across various retail channels [12] - The gastrointestinal product category is a significant growth driver, representing nearly one-fifth of North American sales [13] - The stock trades at a P/S ratio of 3.43, lower than the industry's 5.32, with a recent earnings surprise of 5.17% [16]