Cencora(US:COR)2025-02-05 19:09Revenue 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].