Cencora’s third quarter saw a positive market response, as the company delivered revenue and non-GAAP earnings that exceeded Wall Street expectations. Management pointed to strong growth in its U.S. Healthcare Solutions segment and the contribution of specialty pharmaceuticals as key drivers. CEO Robert Mauch emphasized that investments in areas like specialty distribution and recent acquisitions, such as Retina Consultants of America, enhanced the company’s value to both pharmaceutical manufacturers and healthcare providers. The segment’s operating income growth, driven by volume increases and higher-margin specialty products, was a highlight for the quarter.
Is now the time to buy COR? Find out in our full research report (it’s free for active Edge members).
Cencora (COR) Q3 CY2025 Highlights:
- Revenue: $83.73 billion vs analyst estimates of $83.28 billion (5.9% year-on-year growth, 0.5% beat)
- Adjusted EPS: $3.84 vs analyst estimates of $3.79 (1.4% beat)
- Adjusted EBITDA: $1.18 billion vs analyst estimates of $1.14 billion (1.4% margin, 3.4% beat)
- Adjusted EPS guidance for the upcoming financial year 2026 is $17.60 at the midpoint, beating analyst estimates by 0.7%
- Operating Margin: 0%, in line with the same quarter last year
- Market Capitalization: $70.78 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Cencora’s Q3 Earnings Call
- Lisa Gill (JPMorgan) asked about the strategic logic behind classifying certain businesses as “other” and the focus on specialty. CEO Robert Mauch explained this move reflects a disciplined capital allocation approach to prioritize high-growth specialty areas, such as MSO platforms.
- Elizabeth Anderson (Evercore ISI) questioned the evolution of the MSO platform and benefits of integrating RCA and OneOncology. Mauch highlighted cross-platform synergies, especially in clinical trials and back-office functions, as key future value drivers.
- Michael Cherny (Leerink Partners) inquired about the sustainability of high operating income growth in the U.S. segment. CFO James Cleary clarified that while recent outperformance was aided by acquisitions, core strength remains, and long-term guidance is set at a moderated yet robust level.
- Erin Wilson Wright (Morgan Stanley) pressed on the rationale and challenges of separating businesses now classified as “other.” Cleary stated these units lack significant overlap with the core enterprise and can thrive better under different ownership, supporting Cencora’s focus.
- George Hill (Deutsche Bank) asked if the shift to specialty could sustain margin expansion. Cleary responded that specialty’s higher-margin, service-rich nature is indeed supporting margin improvements, with further gains expected as the business mix evolves.
Catalysts in Upcoming Quarters
In the coming quarters, our analyst team will focus on (1) the pace and impact of divestitures from the “other” segment and progress toward portfolio simplification, (2) signs of accelerated specialty growth, including the integration of RCA and developments in the MSO and OneOncology platforms, and (3) execution of the $1 billion supply chain investment initiative. Progress in technology enhancements and international market recovery will also be important indicators of future performance.
Cencora currently trades at $365, up from $344.69 just before the earnings. Is the company at an inflection point that warrants a buy or sell? Find out in our full research report (it’s free for active Edge members).
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