AmerisourceBergen posts Q2 results, has 'good momentum' heading into second half of FY

VALLEY FORGE, Pa. — AmerisourceBergen posted double-digit gains in second quarter revenue, reflecting a gain in both the AmerisourceBergen Drug Corp. and the AmerisourceBergen Specialty Group.

Revenue for the second quarter ended March 31 totaled $28.5 billion, up 38.6% compared with the year-ago period.

Operating income for the quarter was $416.6 million, up 17% compared with the prior year, as the percentage increase in gross profit was slightly higher than the percentage increase in operating expenses. Operating income as a percentage of revenue decreased 27 basis points to 1.46%.

Diluted earnings per share from continuing operations were up 19.1% to $1.06 in the quarter, compared with 89 cents per share in the year-ago period, driven primarily by the increase in operating income, the company stated.

“We delivered strong performance in our March quarter, as we continued to onboard substantial new business, and made significant progress against our strategic objectives,” said Steven Collis, AmerisourceBergen president and CEO. “With excellent operational performance and improving working capital trends that helped generate tremendous free cash flow in the quarter, we have good momentum heading into the second half of our fiscal year. In addition, we continued to make important investments in our business for the long-term, including signing a definitive agreement to acquire a minority stake in Profarma Distribuidora de Produtos Farmacêuticos S.A. of Brazil, and returned funds to shareholders through repurchasing more than $250 million of our common stock.”

The Pharmaceutical Distribution segment, which includes both AmerisourceBergen Drug Corp. and AmerisourceBergen Specialty Group, posted revenues of $27.9 billion, an increase of 39% compared with the same quarter in the prior year.

ABDC revenues increased 46%, due primarily to the onboarding of all of the new Walgreens branded pharmaceuticals business and a portion of their generic pharmaceuticals business, and increased branded pharmaceutical sales to its other large customers.

ABSG revenues increased 10%, which was driven by strong performance in our blood products, vaccine and physician office distribution businesses. Intrasegment revenues between ABDC and ABSG have been eliminated in the presentation of total Pharmaceutical Distribution revenue. Total intrasegment revenues were $976.3 million and $760.9 million in the quarters ended March 31, 2014 and 2013, respectively.

Operating income of $372.9 million in the March quarter of fiscal 2014 increased 16% compared with the same period in the previous year due to the new Walgreens branded and generic pharmaceuticals business in ABDC, strong contributions from generics overall and solid performance in ABSG, as a flat performance in its community oncology business was offset by strong performance in its blood products and vaccine distribution businesses, the company stated.

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