AP Features, November 1st, 2007
AmerisourceBergen Corp., one the nation's largest drug distributors, said Thursday its quarterly profit fell 28 percent due to a vaccine inventory writedown and a loss from discontinued operations.
The Valley Forge-based company earned $87.6 million, or 50 cents per share in its fiscal fourth quarter, compared with $122 million, or 61 cents, a year earlier. Revenue rose by 5 percent to $16.4 billion.
Excluding one-time items, the company said it earned 63 cents per share.
Analysts polled by Thomson Financial expected a profit of 64 cents per share on revenue of $16.5 billion.
AmerisourceBergen distributes drugs from pharmaceutical companies to retail pharmacies, hospitals, doctors and others for resale to patients. It does not process prescriptions.
"The fundamentals of our industry continue to be very, very strong," said David Yost, AmerisourceBergen's chief executive, in a conference call with analysts.
In the quarter, the company incurred a $24.6 million after-tax loss from discontinued operations at its former Bridge Medical business. AmerisourceBergen also took a 10-cent per share charge to write down its tetanus-diphtheria vaccine inventory.
PharMerica Corp., an institutional pharmacist spun off in July contributed 1 cent per share to fourth-quarter earnings. PharMerica processes and distributes drugs for facilities such as nursing homes,
For the year, AmerisourceBergen posted revenue of $66.1 billion, up 8 percent from last year, and profits of $469.2 million, or $2.50 per share.
Looking ahead, the company expects 2008 profits to range from $2.77 to $2.95 per share, which would be a 13 to 20 percent increase from fiscal 2007, excluding gains from Pharmerica and special items. Analysts were forecasting 2008 earnings of $2.88 per share.
Operating revenue is expected to increase by 5 to 7 percent.
Eric Coldwell, an analyst at Robert Baird and Co. in Milwaukee, said AmerisourceBergen should gain in fiscal 2008 without being dragged down PharMerica, since the business will be counted as discontinued operations.
"That business has been a challenge," he said. "Other diversified businesses have been either doing well or expanding, or they had been doing poorly and are being restructured."
Shares of AmerisourceBergen fell by $1.92, or 4.1 percent, to close at $45.19 Thursday.
