Cencora misses revenue estimates on weight-loss drug shortage
By Mariam Sunny
(Reuters) -Cencora missed Wall Street estimates for second-quarter revenue on Wednesday as a shortage of popular weight-loss drugs constrained sales, sending the drug distributor's shares down 4%.
Overwhelming demand for newer weight-loss treatments known as GLP-1 agonists, including Novo Nordisk's Wegovy and Eli Lilly's Zepbound, has weakened supply and most dosages of these drugs are now in shortage.
"While we've continued to see growth in sales of GLP-1 products, this quarter, the growth rate moderated as we lapped the rapid adoption of the products in the second quarter of our fiscal 2023 and due to GLP-1 supply constraints in the quarter," Cencora CFO James Cleary said on an earnings conference call.
Sales at Cencora's U.S. healthcare business, its largest unit by revenue, came in at $61.3 billion in the second quarter ended March 31, compared with analysts' estimates of $63.37 billion, according to LSEG data.
Total sales rose nearly 8% to $68.41 billion, below estimates of $70.65 billion.
However, the company beat expectations for quarterly profit despite a rise in costs.
Its operating expenses jumped more than 14% to $2 billion, higher than estimates of $1.5 billion, primarily due to higher litigation and opioid-related costs.
Cencora also raised the lower end of its 2024 adjusted earnings forecast, driven by robust demand for costly specialty medicines that treat complex diseases such as cancer and rheumatoid arthritis.
It now sees full-year adjusted earnings of between $13.30 and $13.50 per share, from $13.25 to $13.50 estimated previously.
Analysts were expecting an annual profit of $13.45 per share.
On an adjusted basis, Cencora reported quarterly profit of $3.80 per share, beating estimates of $3.69.
(Reporting by Mariam Sunny in Bengaluru; Editing by Devika Syamnath)
