May 6 (Reuters) – Cencora reported second-quarter results below Wall Street estimates on Wednesday but raised its annual profit forecast, betting on a steady demand for specialty medicines.
The company has been narrowing its focus on drug distribution, divesting its non-core businesses while doubling down on its core operations to drive long-term performance.
Earlier this year, Cencora bought the retina-care business of EyeSouth Partners for $1.1 billion, bolstering its specialty medical services business and divested its animal health unit in February.
Cencora and other drug distributors have been capitalizing on surging demand for high-cost specialty drugs treating conditions like rheumatoid arthritis and cancer, which generate strong margins.
Second-quarter sales at Cencora’s U.S. healthcare business, its largest unit by revenue, rose 2.9% to $68.8 billion, helped by specialty medicines and GLP-1 drugs.
Analysts on an average were expecting a revenue of $71.26 billion for the unit, according to data compiled by LSEG.
Revenue growth at the unit was hurt by manufacturers cutting prices on branded drugs, lower sales to a large mail order client and 2025 losses of an oncology customer as well as a grocery customer, Cencora said.
Total quarterly revenue of $78.4 billion missed analysts’ estimates of $81.09 billion.
Peer Cardinal Health last week also missed Wall Street expectations for quarterly revenue, but raised its profit forecast for the third time in the past four months.
Cencora forecast annual profit of $17.65-$17.90 per share, higher than its previous expectation of $17.45-$17.75 per share. Analysts expected a profit of $17.60 per share.
The company earned a profit of $4.75 per share on an adjusted basis, missing estimates of $4.81 per share.
(Reporting by Sneha S K in Bengaluru; Editing by Joyjeet Das)
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