Cencora lifts profit forecast after oncology deal
The drug distributor raised its full-year adjusted earnings guidance to as much as $17.90 a share.
The pharmaceutical-services provider Cencora (COR) reported second-quarter earnings that topped Wall Street estimates and raised its full-year profit outlook, buoyed by a February acquisition of cancer-care network OneOncology.
Results for the three months ended March 31 underscored the deal’s immediate impact: revenue rose 3.8% year-over-year to $78.4 billion, while gross profit margin expanded 52 basis points to 4.58%. The acquisition also drove a $1.1 billion remeasurement gain that lifted GAAP diluted earnings to $8.40 a share, more than double the $3.68 recorded in the prior-year quarter.
Underlying performance was steadier. Adjusted diluted earnings grew 7.5% to $4.75 a share, accelerating from the 7.6% gain in the prior quarter. Adjusted gross profit margin widened 45 basis points to 4.31%, and adjusted operating income margin inched up 3 basis points to 1.61%.
The U.S. Healthcare Solutions segment, which accounts for nearly 90% of revenue, grew 2.9% to $68.8 billion, decelerating from the 4% to 6% annual guidance range. Sales of GLP-1 class products rose, but manufacturer price declines and customer losses offset the gains. Operating income in the unit climbed 5.6% to $998.3 million, below the 14% to 16% full-year target. Overseas, the International Healthcare Solutions segment posted a 13.0% revenue increase to $7.6 billion, or 7.2% on a constant-currency basis, outpacing its 8% to 10% annual guidance.
Cencora raised its fiscal 2026 adjusted diluted earnings guidance to a range of $17.65 to $17.90 a share, up from $17.45 to $17.75 previously. The company also narrowed its net interest expense forecast to approximately $485 million, reflecting financing costs tied to the OneOncology deal.
Management announced plans to repurchase $1 billion in shares by the end of calendar 2026, resuming opportunistic buybacks after reducing debt. The company reaffirmed its long-term targets for adjusted operating income growth of 7% to 10% and adjusted diluted earnings growth of 10% to 14%.