Cencora lifts annual profit view on strong demand for specialty medicines

U.S. drug distributor Cencora COR.N raised its annual adjusted profit forecast on Wednesday after quarterly results beat Wall Street expectations, driven by strong demand for specialty medicines, sending its shares up 3.7% in morning trade.

Here are the details:

• The company has been sharpening its focus on drug distribution, offloading its non-core businesses while doubling down on its core segments to drive long-term performance.
• Cencora and its peers, including Cardinal Health CAH.N and McKesson MCK.N, have long benefited from strong demand for expensive specialty drugs used to treat diseases such as cancer and rheumatoid arthritis, a segment that offers more attractive profit margins.
• Third-quarter sales at Cencora's U.S. healthcare business, its largest unit by revenue, rose 4.9% to $74.86 billion, helped by strength in specialty medicines and GLP-1 drugs.
• Total third quarter revenue of $84.75 billion beat analysts' estimates of $84.32 billion, according to data compiled by LSEG.
• Cencora's proposed merger of MWI Animal Health and Covetrus would hit operating profit by roughly $150 million if it closes mid-fiscal year, CFO Eva Boratto said, adding that no timeline had been set.
• Barclays analyst Glen Santangelo said a rebound in U.S. Healthcare revenue and adjusted operating income growth should help ease concerns over specialty drug volumes and GLP-1 pressures that weighed on the stock in the previous quarter.
• Cencora now expects annual profit in the range of $17.75 and $17.95 per share, higher than its previous expectation of $17.65 and $17.90 per share.
• The company earned an adjusted $4.48 per share for the quarter ended June 30, beating estimates of $4.35 per share.
• Cencora kept its annual revenue growth forecast intact at 4% to 6%.