Zinger Key Points
- Cencora's Q1 sales rose 12.8% to $81.5B, surpassing the estimate, driven by GLP-1 drug sales and specialty product growth.
- Adjusted EPS grew 13.7% to $3.73, topping the consensus. FY25 EPS outlook raised, with revenue growth now expected at 8%-10%.
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On Wednesday, Cencora, Inc COR reported first-quarter 2025 sales increased 12.8% to $81.5 billion, beating the consensus of $78.38 billion.
The sales jump reflects a 13.6% increase in revenue within the U.S. Healthcare Solutions segment of $74 billion due to overall market growth primarily driven by unit volume growth, including increased sales of products labeled for diabetes and/or weight loss in the GLP-1 class and increased sales of specialty products to physician practices and health systems.
The company reported adjusted EPS of $3.73, up 13.7% year over year, beating the consensus of $3.50.
Adjusted gross profit in the first quarter of fiscal 2025 was $2.5 billion, a 6.1% increase compared to the same period in the previous fiscal year due to the increase in gross profit in both reportable segments.
Adjusted gross profit as a percentage of revenue was 3.11% in the fiscal 2025 first quarter, a decrease of 20 basis points from the prior year quarter due to the decline in U.S. Healthcare Solutions gross profit margin primarily due to increased sales of products labeled for diabetes and/or weight loss in the GLP-1 class, which have lower gross profit margins, lower COVID-19 vaccine sales and a lack of exclusive COVID-19 therapy sales, which have higher gross profit margins.
In the first quarter of fiscal 2025, adjusted operating income was $949.3 million, a 7.2% increase compared to the same period in the prior fiscal year, driven by a 9.9% increase in the U.S. Healthcare Solutions segment, partially offset by a 2.9% decrease in the International Healthcare Solutions segment.
Guidance: Cencora expects adjusted diluted EPS of $15.25 to $15.55, up from the previous range of $15.15 to $15.45 provided on January 2 and the initial guidance range of $14.80 to $15.10 and consensus of $15.28.
Revenue growth in 2025 is expected to be 8%-10% compared to prior guidance of 7%-9%.
- U.S. Healthcare Solutions revenue growth is expected to be 9%-11%, up from a previous range of 7%-9%.
- International Healthcare Solutions revenue growth to be 4%-5%, from the previous range of 7%-9%.
Price Action: COR stock is down 0.88% at $279.35 at the last check on Wednesday.
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