In the last reported quarter, the company delivered an earnings surprise of 1.3%. Its earnings beat estimates in each of the trailing four quarters, the average surprise being 5.5%.
The Zacks Consensus Estimate for first-quarter fiscal 2022 revenues is pegged at $59.42 billion, indicating an improvement of 13.1% from the prior-year quarter. The consensus mark for earnings stands at $2.59, suggesting growth of 18.8% from the year-ago reported figure.
It is worth mentioning that AmerisourceBergen made a strategic evaluation of its reporting structure in order to represent its expanded international presence, courtesy of the Alliance Healthcare buyout in June 2021. Consequently, starting from the first quarter of fiscal 2022, the company has realigned its reporting structure under two reportable segments — U.S. Healthcare Solutions and International Healthcare Solutions.
Factors to Note
Sustained growth in specialty product sales, including COVID-19 treatments along with overall market growth, at this U.S. Healthcare Solutions segment may have benefited the fiscal first-quarter performance. With respect to this segment, revenues are expected in the band of $207 billion to $212 billion in fiscal 2022, representing growth of 2-5%. Consequently, this may get reflected in the fiscal first quarter results.
Solid organic growth rates in the U.S. pharmaceutical market and population demographics might have favored the to-be-reported quarter’s performance.
In fiscal 2022, operating income at this segment is anticipated between $2.33 billion and $2.4 billion, reflecting growth of 3-6%. This, in turn, is likely to get reflected in the fiscal first-quarter results.
Apart from this, the World Courier unit is likely to have exhibited solid performance in the fiscal first quarter. During the fiscal fourth quarter of 2021, the business continued to provide high-specialty logistics worldwide despite the challenging global logistics environment, while boosting innovation with clinical trials in at-home settings. This trend is likely to have sustained in the fiscal first quarter as well.
Enhancing customer experience through new offerings, technology improvements and delivery of high tax logistics services might have contributed to the fiscal first-quarter performance. The company’s to-be-reported quarter’s results are likely to reflect solid demand for its high touch global specialty logistics.
Per the fiscal 2022 guidance, operating income at the International Healthcare solutions segment is estimated to improve in the range of $685 million to $715 million. This, in turn, is likely to get reflected in the fiscal first-quarter results.
However, higher adjusted operating expenses may have weighed on the company’s performance in the to-be-reported quarter.
What Our Quantitative Model Suggests
Per our proven model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. This is not the case here as you will see.
Earnings ESP: AmerisourceBergen has an Earnings ESP of -0.91%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: It carries a Zacks Rank #3.
Stocks Worth a Look
Here are some medical stocks worth considering as these have the right combination of elements to post an earnings beat this quarter.
AMN Healthcare Services, Inc. (AMN – Free Report) has an Earnings ESP of +10.29% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
AMN Healthcare’s long-term earnings growth rate is estimated at 16.2%. The company’s earnings yield of 5.5% compares favorably with the industry’s 0.8%.
Henry Schein’s long-term earnings growth rate is estimated at 11.8%. The company’s earnings yield of 5.9% compares favorably with the industry’s 4.1%.
Hologic’s long-term earnings growth rate is estimated at 7.4%. The company’s earnings yield of 5.3% compares favorably with the industry’s (5.1%).
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