Cencora(US:COR) ZACKSยท2025-05-07 18:10Core Insights - Cencora, Inc. reported strong second-quarter fiscal 2025 results, with adjusted EPS of $4.42, exceeding estimates by 8.3% and showing a year-over-year increase of 16.3% [1] - Revenue reached $75.45 billion, reflecting a 10.3% year-over-year growth and surpassing consensus estimates by 0.8% [1] Revenue Details - U.S. Healthcare Solutions segment generated revenues of $68.3 billion, up 11.4% year-over-year, driven by increased unit volume and sales of GLP-1 drugs and specialty products [2] - International Healthcare Solutions segment revenues amounted to $7.2 billion, a slight increase of 0.7% year-over-year, with a 5.7% rise at constant currency [4] Operating Income - Total segmental operating income was $1 billion, up 22.8% year-over-year, supported by higher gross profit from distributing COVID-19 treatments and sales to specialty practices, despite rising operating expenses [3] - Operating income for the International Healthcare Solutions segment was $159.3 million, down 17.3% year-over-year, attributed to lower income from global specialty logistics and European distribution [4] Margin Analysis - Adjusted gross profit was $2.9 billion, a 15.2% increase year-over-year, with an adjusted gross margin of 3.9%, up 16 basis points [5] - Adjusted operating income reached $1.2 billion, up 15.3% year-over-year, with an adjusted operating margin of 1.6%, expanding 7 basis points from the previous year [5] Financial Update - Cencora ended the fiscal second quarter with cash and cash equivalents of $1.98 billion, down from $3.22 billion in the previous quarter [6] - Cumulative net cash used in operating activities was $632.5 million, compared to $6.7 million in net cash provided a year ago [6] Dividend Update - The board declared a quarterly dividend of 55 cents per share, payable on June 2, 2025, to shareholders of record by May 16, 2025 [7] FY25 Guidance - The company updated its fiscal 2025 earnings and revenue outlook, projecting adjusted EPS in the range of $15.70-$15.95, up from $15.30-$15.60 [8] - Revenue growth for the International Healthcare Solutions segment is now expected to be 3-4%, down from 4-5%, while adjusted operating income is anticipated to improve by 13.5-15.5% [9] - Operating income for the U.S. Healthcare Solutions segment is expected to improve by 17.5-19.5%, while the International segment is projected to decline by 1-4% [10] Overall Performance - Cencora's strong performance in the fiscal second quarter, with earnings and revenues exceeding estimates, has led to a 29.4% increase in shares year-to-date, contrasting with a 3% decline in the industry and a 5% drop in the S&P 500 [11] - The company continues to experience robust segmental performance, driven by strong demand for specialty products and GLP-1 drugs [12]