CONSHOHOCKEN, PA — Cencora, Inc. (NYSE: COR) reported a robust third quarter for fiscal year 2024, with revenue climbing 10.9% year-over-year to $74.2 billion. The company also raised its full-year guidance, reflecting continued strong performance in its U.S. Healthcare Solutions segment.
For the third quarter ending June 30, GAAP diluted earnings per share (EPS) stood at $2.42, up from $2.35 in the previous year. Adjusted diluted EPS, which excludes certain items, increased 14.4% to $3.34, compared to $2.92 in the prior year’s third quarter.
“We are pleased to raise our fiscal 2024 guidance following Cencora’s strong third quarter results, as our purpose-driven team members exhibited another quarter of solid execution against our pharmaceutical-centric strategy,” said Steven H. Collis, Chairman, President, and CEO of Cencora.
Segment Performance Analysis
Revenue in the U.S. Healthcare Solutions segment rose 12.2% to $67.2 billion, driven by market growth and higher sales of products for diabetes and weight loss. Segment operating income grew by 9.9% to $698.3 million, supported by increased gross profit.
International Healthcare Solutions saw flat revenue at $7.1 billion. Segment operating income fell by 4.1% to $179.4 million, primarily due to higher IT expenses in Europe and lower gains in global specialty logistics, offset partly by strong performance in Canada.
Financial Metrics
Gross profit for Q3 was $2.4 billion, a 6.5% increase from the prior year. Operating income remained flat at $672.5 million. Operating expenses climbed 9% to $1.7 billion, influenced by higher litigation and opioid-related costs, and increased distribution and administrative expenses.
Net interest expense dropped 45.9% to $31.3 million, thanks to higher interest income and reduced variable-rate borrowings.
Updated Guidance
Cencora has updated its fiscal year 2024 guidance, now expecting adjusted diluted EPS in the range of $13.55 to $13.65, up from the previous range of $13.35 to $13.55. The company also expects revenue growth of approximately 12%, driven by a 12-13% increase in U.S. Healthcare Solutions revenue.
Is Cencora a Buy, Sell, or Hold?
Cencora’s strong financial performance and raised guidance indicate a healthy growth trajectory. The company’s strategic focus on healthcare solutions and robust revenue growth make it an attractive buy for potential investors. Existing shareholders may consider holding their positions, given the company’s solid market positioning and optimistic outlook.
In summary, Cencora’s Q3 results and improved guidance suggest a promising future, making it a compelling option for both current and prospective investors.
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