Cencora raises annual profit forecast on strong demand for specialty drugs
The Philadelphia-based company now expects its annual adjusted profit between $15.85 and $16.00 per share, up from its previous expectation of $15.70 to $15.95 per share. Analysts, had expected a profit of $15.83 per share, according to LSEG data.
The robust results underscore how Cencora and its peers Cardinal Health (CAH.N), opens new tab and McKesson Corp (MCK.N), opens new tab are capitalizing on the increasing U.S. demand for high-margin medicines that treat complex conditions, such as rheumatoid arthritis and cancer.
"Our teams are fueling our growth as they identify opportunities and customer-centric solutions that strengthen our value proposition as the partner of choice," CEO Robert Mauch said in a statement.
Leerink Partners analyst Michael Cherny said "the underlying drivers of the guidance increase were more impressive to us than the headlines."
Sales at Cencora' U.S. Healthcare Solutions unit, its biggest revenue driver, jumped 8.5% to $72.9 billion in the quarter ended June 30, buoyed by strong prescription volumes of GLP-1 class drugs used for diabetes and weight loss, as well as higher sales of specialty medicines to physician practices and health systems.
The company said its improved forecast reflects "stronger earnings growth in the U.S. Healthcare Solutions segment," which has benefited from heightened demand for complex and costly therapies such as GLP-1 drugs, including Novo Nordisk's NOVOb.CO> Wegovy and Eli Lilly's (LLY.N), opens new tab Zepbound.
Cencora reported a third-quarter profit of $4 per share, beating analysts' estimates of $3.84 per share.
Total sales were $80.66 billion during the quarter, above the estimates of $80.14 billion.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Reuters
25 minutes ago
- Reuters
Air Canada flight attendants reject binding arbitration ahead of possible strike
MONTREAL, Aug 12 (Reuters) - Air Canada ( opens new tab flight attendants rejected the airline's proposal for binding arbitration on Tuesday and continued direct talks, the Canadian Union of Public Employees said on Tuesday. Flight attendants, who demonstrated on Monday, opens new tab at major Canadian airport hubs, could strike as early as August 16. Higher wages and ending the current practice of paying flight attendants only when the plane is in motion are key issues in the contract talks. Flight attendants at U.S. carriers such as American Airlines have made some gains in recent contracts. The union said Air Canada has offered to begin compensating flight attendants for some work that is currently unpaid but only at 50% of their hourly rate. Air Canada was not immediately available for comment. The union represents the more than 10,000 flight attendants at Air Canada.
The Independent
26 minutes ago
- The Independent
What would Trump's reclassifying of cannabis mean?
Donald Trump is reportedly re-evaluating the federal classification of marijuana, a move that could significantly alter its legal status across the United States and bring federal policy closer to the approach already adopted by numerous states. Mr Trump indicated on Monday that he hopes to make a decision in the coming weeks regarding potential changes to how marijuana is regulated. This renewed focus comes over a year after the Biden administration formally proposed reclassifying the drug, though no decision was reached before Mr Biden left office. Meanwhile, many states have already gone further than the federal government by legalizing the recreational use of marijuana for adults or allowing it for medical purposes. Current policy Under current federal policy, possessing marijuana remains a federal crime punishable by fines and prison time. Selling or cultivating marijuana is considered a more serious offence, carrying potential prison sentences of five years to life, depending on the quantity. Last year, the Justice Department proposed reclassifying marijuana from a Schedule I drug, a category that includes substances like heroin and LSD, to a less dangerous Schedule III substance, which encompasses drugs such as ketamine and certain anabolic steroids. This proposed switch initiated a lengthy bureaucratic process. Nearly 43,000 public comments were submitted to the federal government regarding the suggested change. The Drug Enforcement Administration (DEA) was still in the review process when Mr Trump succeeded Mr Biden in January, prompting a re-examination of policies across the federal government. Reclassifying marijuana would not, however, equate to nationwide legalization for recreational use by adults. Instead, it would primarily alter how the substance is regulated and taxed. Currently, federal income tax deductions for business expenses are unavailable to enterprises involved in "trafficking" any Schedule I or II drug. Changing marijuana to a Schedule III drug could therefore result in significant tax savings for businesses licensed to sell marijuana in states where it is legal. Furthermore, it could facilitate research into marijuana, as conducting authorized clinical studies on Schedule I substances is exceptionally difficult. Despite these potential changes, a Congressional Research Service report suggests that the reluctance of many banks and financial institutions to provide services to marijuana businesses, due to the potential for federal penalties, is unlikely to change merely by rescheduling marijuana under the federal Controlled Substances Act. What could Trump do? Mr Trump is currently weighing the pros and cons of such a policy change, acknowledging it as a "very complicated subject." He stated on Monday: "I've heard great things having to do with medical" use of marijuana and "bad things having to do with just about everything else." As a candidate, Mr Trump appeared open to relaxed regulation, having posted on his social media platform last year that he would "focus on research to unlock the medical uses of marijuana to a Schedule 3 drug." However, reclassification faces resistance from some conservatives and law enforcement groups. The National Sheriffs' Association, for instance, submitted written opposition, citing prior determinations that marijuana has a "high abuse potential" and highlighting cases of "extreme intoxication" and fatal vehicle crashes. At the state level, the medical use of marijuana is already permitted in 40 states and the District of Columbia. Over the past dozen years, the number of jurisdictions legalizing recreational marijuana for adults has rapidly increased to 24 states and the District of Columbia. However, the movement has experienced some recent setbacks. Last autumn, ballot measures to legalise recreational marijuana failed in Florida, North Dakota, and South Dakota. Florida's measure, while receiving a majority vote, fell short of the 60 per cent threshold required to approve amendments to the state constitution. This year, Idaho lawmakers referred a proposed constitutional amendment to the ballot that would forbid citizen initiatives to legalise marijuana, instead reserving such decisions solely for the Legislature. Initiatives continue elsewhere to try and place recreational marijuana on the ballot, including in Oklahoma, where voters defeated a similar measure in 2023. Public opinion data indicates significant support for legalization. Approximately six in 10 voters across the country favour legalising recreational use nationwide, according to AP VoteCast, a survey of over 120,000 US voters conducted during last year's election. Polling from Gallup shows support for marijuana legalization has grown substantially, from just 36 per cent support in 2005 to 68 per cent last year. Marijuana use has also increased. More than 64 million Americans aged 12 and older – or 22.3 per cent of people – reported using marijuana during the past year, according to a 2024 national survey released recently by the federal Substance Abuse and Mental Health Services Administration. This marks an increase from 19 per cent of people in 2021. The growth in marijuana use was primarily driven by adults aged 26 and older, although people aged 18-25 remained the most likely to partake, with 35 per cent reporting use during the past year.
The Independent
26 minutes ago
- The Independent
Spirit Airlines warns it could soon go out of business as Americans shy away from trips
Spirit Airlines warned Monday that despite emerging from bankruptcy and pursuing new revenue streams, it may not be able to stay in business over the next year. Just five months after emerging from Chapter 11 bankruptcy, its parent company, Spirit Aviation Holdings, says there is "substantial doubt" about the airline's ability to continue operating over the next year, according to its quarterly report published Monday. Despite efforts to restructure debt and secure new financing following its exit from bankruptcy in March, the airline faces continued challenges. Weak demand for domestic leisure travel and enduring operational uncertainties are among the critical pressures prompting the warning. By early Tuesday afternoon, Spirit's stock had plunged nearly 40 percent, trading at just above $2.20. The airline said it expects to continue 'for at least the remainder of 2025.' Famous for its no-frills, ultra-low-cost flights aboard bright yellow jets, Spirit has faced ongoing challenges regaining its footing and staying competitive since the COVID-19 pandemic. Escalating operating expenses and growing debt pushed the carrier to file for bankruptcy protection in November 2024, after racking up more than $2.5 billion in losses since early 2020. Spirit became the first major US airline to file for Chapter 11 bankruptcy since American Airlines did so in 2011. Spirit has implemented cost-saving measures, including furloughing 270 pilots and demoting 140 captains, with changes scheduled for October 1 and November 1 to align with anticipated flight volumes in 2026. The airline also plans to sell aircraft and real estate to generate much-needed cash. Spirit is also shifting strategy and rolling out tiered pricing with added amenities, aiming to appeal to higher-paying travelers and diversify beyond its traditional ultra-low-fare base. Previous talks of mergers or takeovers, by JetBlue or Frontier, have stalled, and Spirit has signaled no renewed interest in such moves since restructuring.
