COR Q3 Earnings & Revenues Beat Estimates, '25 EPS View Raised

Cencora, Inc. COR reported third-quarter fiscal 2025adjusted earnings per share (EPS) of $4.00, which beat the Zacks Consensus Estimate of $3.78 by 5.8%. The bottom line also improved 19.8% year over year.

GAAP EPS was $3.52, up 45.5% from the year-ago period’s level. The significant gain was primarily driven by robust top-line growth.

Revenue Details

Revenues totaled $80.7 billion, up 8.7% year over year. The top line beat the Zacks Consensus Estimate by 0.5%.

Cencora, Inc. Price, Consensus and EPS Surprise

Cencora, Inc. price-consensus-eps-surprise-chart | Cencora, Inc. Quote

Segmental Analysis

U.S. Healthcare Solutions

Revenues in this segment totaled $72.9 billion, up 8.5% on a year-over-year basis. This improvement was driven by overall market growth on increased unit volume, including improved sales of GLP-1 drugs and specialty products.

Segmental operating income totaled $901.8 million, up 29.1% year over year. Higher gross profit (as a result of increased product sales and the January 2025 acquisition of RCA) contributed to the upside, partly offset by increased operating expenses.

International Healthcare Solutions

This segment includes Alliance Healthcare, World Courier, Innomar and Profarma Specialty.

Revenues amounted to $7.8 billion, up 10.5% year over year. The top line increased 8.8% at constant currency (cc).

Operating income totaled $156.2 million, down 12.9% on a reported basis and 16.2% at cc. The reported decline was due to lower operating income at COR’s global specialty logistics and specialized consulting services businesses.

Margin Analysis

Cencora reported an adjusted gross profit of $2.9 billion, up 20.7% on a year-over-year basis. As a percentage of revenues, the adjusted gross margin was 3.55%, up 36 basis points (bps) year over year.

The company recorded an adjusted operating income of $1.1 billion, up 20.6% year over year. As a percentage of revenues, the adjusted operating margin was 1.31%, which expanded 13 bps from the year-ago quarter’s level.

Financial Update

COR exited the fiscal third quarter with cash and cash equivalents worth $2.23 billion compared with $1.98 billion in the previous quarter.

Cumulative net cash provided by operating activities totaled $741.7 million compared with $2.48 billion a year ago.

Dividend Update

Cencora's board of directors declared a quarterly dividend of 55 cents per share. The new dividend is payable on Sept. 2, 2025, to shareholders of record at the close of business on Aug. 15, 2025.

FY25 Guidance

The company updated its previous outlook for fiscal 2025 earnings and revenues, suggesting stronger earnings growth in the U.S. Healthcare Solutions segment.

Adjusted EPS is now estimated to be in the $15.85-$16.00 range, up from the previous guidance of $15.70-$15.95. The Zacks Consensus Estimate for the same is pegged at $15.81.

Total revenues are now projected to rise approximately 9% from the previous guidance of 8-10%. Sales at the U.S. Healthcare Solutions segment are now anticipated to grow in the range of 9-10% (previously 9-11%). For the International Healthcare solutions business, revenues are now projected to rise 6-7% from the previous guidance of 3-4%. On a cc basis, the International Healthcare Solutions segment’s revenue growth is expected to be in the range of 7-8%, down from the previous guidance of 6-8%.

Adjusted operating income is expected to improve 15-16% for fiscal 2025, up from the earlier guidance of 13.5-15.5%.

Operating income for the U.S. Healthcare Solutions segment is now expected to improve 20-21% (previously 17.5-19.5%), while the same for the International Healthcare Solutions business is estimated to decline approximately 6% (previous decline of 1-4%) year over year and 5% at cc.

Our Take

Cencora exited the fiscal third quarter on a strong note, wherein its earnings and revenues beat the Zacks Consensus Estimate. The company’s EPS guidance for fiscal 2025 was also above estimates. However, shares were down 0.8% in pre-market trading. So far this year, COR’s shares have gained 29.4% against the industry’s decline of 3%. The S&P 500 Index was down 5% in the same time period.

The company continues to witness robust segmental performance due to growth in all markets and strong demand for specialty products and GLP-1 drugs. Per management, Cencora delivered a solid performance by playing a crucial role in the healthcare system while maintaining efficiency throughout its business. The company has been focused on its priorities. It has thoughtfully deployed capital to deliver long-term growth.

The acquisition of RCS appears promising, as it is expected to become accretive to this fiscal year’s bottom line.

However, COR’s gross margin continues to be negatively impacted by lower-margin GLP-1 drugs and the lack of exclusive COVID-19 therapy sales, which had higher margins. The company’s rising expenses to support business activities amid inflationary challenges put pressure on the operating margin. Cut-throat competition in the MedTech space is another headwind.

COR’s Zacks Rank & Other Key Picks

COR carries a Zacks Rank #2 (Buy) at present.

Some other top-ranked stocks in the broader medical space that have announced quarterly results are Medpace Holdings, Inc. MEDP, West Pharmaceutical Services, Inc. WST and Boston Scientific Corporation BSX.

Medpace Holdings, sporting a Zacks Rank #1 (Strong Buy) at present, reported second-quarter 2025 EPS of $3.10, which beat the Zacks Consensus Estimate by 3.3%. Revenues of $603.3 million outpaced the consensus mark by 11.5%. You can see the complete list of today’s Zacks #1 Rank stocks here.

Medpace Holdings has a long-term estimated growth rate of 11.4%. MEDP’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 13.9%.

West Pharmaceutical reported second-quarter 2025 adjusted EPS of $1.84, which beat the Zacks Consensus Estimate by 21.9%. Revenues of $766.5 million surpassed the Zacks Consensus Estimate by 5.4%. It currently flaunts a Zacks Rank #1.

West Pharmaceutical has a long-term estimated growth rate of 8.5%. WST’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 16.8%.

Boston Scientific reported second-quarter 2025 adjusted EPS of 75 cents, which beat the Zacks Consensus Estimate by 4.2%. Revenues of $5.06 billion surpassed the Zacks Consensus Estimate by 3.5%. It currently carries a Zacks Rank #2.

Boston Scientific has a long-term estimated growth rate of 14%. BSX’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 8.1%.

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This article originally published on Zacks Investment Research (zacks.com).

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