Cencora Reports Strong Fiscal 2024 Fourth Quarter

Cencora, a leading healthcare solutions provider, announced robust results for its fiscal 2024 fourth quarter, highlighting significant earnings and revenue growth. During the earnings call, President/CEO Bob Mauch and Senior VP Bennett Murphy indicated a 15% year-over-year increase in adjusted earnings, along with the acquisition of Retina Consultants of America (RCA). Strategic moves related to specialty pharmaceuticals and infrastructure investments were key discussion points alongside a positive outlook for fiscal 2025. Cencora anticipates continuing growth, buoyed by strong performance in specialty distribution and the expected benefits from the RCA acquisition.

Key Takeaways

• Adjusted diluted EPS for Q4 increased 17% year-over-year to $3.34.
• Consolidated revenue rose 15% to $79.1 billion, with gross profit up 7%.
• U.S. Healthcare Solutions segment saw a 16% revenue increase, boosted by a 55% rise in GLP-1 product sales.
• International Healthcare Solutions revenue grew 6%, though operating income dropped 9%.
• Fiscal 2025 guidance indicates an adjusted diluted EPS between $14.80 and $15.10 and projected revenue growth of 7% to 9%.
• RCA acquisition expected to contribute approximately $0.35 in its first year.

Company Outlook

• Expected 8% to 10% growth in fiscal 2025 adjusted diluted EPS.
• Revenue growth projected between 7% and 9%, and operating income growth between 5% and 6.5%.
• RCA acquisition aligns with Cencora’s strategic focus and is anticipated to enhance MSO solutions.

Bearish Highlights

• International Healthcare Solutions showed a 9% decrease in operating income due to increased expenses and lower performance in Canada.
• Anticipated headwinds from COVID-related products.

Bullish Highlights

• Strong prescription utilization in the U.S. Healthcare Solutions segment, particularly for GLP-1 products.
• Optimism surrounding the pharmaceutical pipeline in retina, including potential biosimilars.
• OneOncology and PharmaLex acquisitions viewed as strategic assets.

Q&A Highlights

• Mauch addressed MSO model concerns amidst regulatory scrutiny, defending its benefits for community providers.
• Strategic expansion beyond oncology into new specialties like ophthalmology is supported by the RCA acquisition.

Overall, Cencora's Q4 earnings call showcased the company’s strong performance and proactive strategic initiatives. With the RCA acquisition and a focus on specialty pharmaceuticals, Cencora is well-positioned for growth in fiscal 2025 despite facing potential headwinds and regulatory challenges.

InvestingPro Insights

Cencora's strong Q4 performance is confirmed by InvestingPro data, showing a market capitalization of $48.3 billion and 11.56% revenue growth over the last twelve months. The company's recent dividend raise for 19 consecutive years highlights its commitment to shareholder value. Estimated strong free cash flow yield supports its strategic acquisitions and investments in specialty pharmaceuticals.

Full Transcript – Cencora Inc Q4 2024

Operator: Hello everyone, and welcome to Cencora's Q4 Full Year 2024 Earnings Call. My name is Drew, and I'll be the operator today. …

The discussion continued with detailed financial assessments, segment results, and expectations for future performance under new leadership, emphasizing consistency in strategy and strong market positioning without specific misses during the call. Cencora remains focused on supporting healthcare providers while steering through challenging market dynamics.

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