Cencora misses revenue estimates on weight-loss drug shortage
Rewrites throughout to reflect revenue miss, adds executive comments in paragraph 3
By Mariam Sunny
May 1 (Reuters) -Cencora COR.N missed Wall Street estimates for second-quarter revenue on Wednesday as a shortage of popular weight-loss drugs constrained sales, sending the drug distributor's shares down 4%.
Overwhelming demand for newer weight-loss treatments known as GLP-1 agonists, including Novo Nordisk's NOVOb.CO Wegovy and Eli Lilly's LLY.N Zepbound, has weakened supply and most dosages of these drugs are now in shortage.
"While we've continued to see growth in sales of GLP-1 products, this quarter, the growth rate moderated as we lapped the rapid adoption of the products in the second quarter of our fiscal 2023 and due to GLP-1 supply constraints in the quarter," CencoraCFO James Cleary said on an earnings conference call.
Sales at Cencora's U.S. healthcare business, its largest unit by revenue, came in at $61.3 billion in the second quarter ended March 31, compared with analysts' estimates of $63.37 billion, according to LSEG data.
Total sales rose nearly 8% to $68.41 billion, below estimates of $70.65 billion.
However, the company beat expectations for quarterly profit despite a rise in costs.
Its operating expenses jumped more than 14% to $2 billion, higher than estimates of $1.5 billion, primarily due to higher litigation and opioid-related costs.
Cencora alsoraised the lower end of its 2024 adjusted earnings forecast, drivenby robust demand for costly specialty medicines that treat complex diseases such as cancer and rheumatoid arthritis.
It now sees full-year adjusted earnings of between $13.30 and $13.50 per share, from $13.25 to $13.50 estimated previously.
Analysts were expecting an annual profit of $13.45 per share.
On an adjusted basis, Cencora reported quarterly profit of $3.80 per share, beating estimates of $3.69.
Reporting by Mariam Sunny in Bengaluru; Editing by Devika Syamnath
Latest News
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.
