AmerisourceBergen’s pharmaceutical distribution segment drives Q3 revenue increase
VALLEY FORGE, Pa. — AmerisourceBergen on Thursday reported its third quarter results, posting a 4.9% increase in revenue, which hit $38.7 billion. The company’s gross profit declined 2.5% to $1.1 billion, which it attributed to a $121 million decrease in gains from antitrust litigation settlements and a decrease in the pharmaceutical distribution services segment.
“AmerisourceBergen continues to execute successfully in a dynamic marketplace. We are providing our customers with the highest quality pharmaceutical distribution services and the most innovative solutions to grow their businesses,” AmerisourceBergen chairman, CEO and president Steve Collis said. “For example, we are fully rolling out and implementing our innovative ABC Order platform — an ordering system designed by pharmacists for pharmacists that completely changes the way independent pharmacies manage their product orders. Early customer feedback on the platform has been extremely positive, with pharmacists citing ease of use and real-world business value.”
The company’s pharmaceutical distribution services segment saw revenue of $37 billion, a 4.7% increase over the same quarter last year, with the AmerisourceBergen Drug Corp. seeing a revenue increase of 4.5% due largely to organic sales growth. AmerisourceBergen Specialty Group posted a 10.3% revenue increase, marking the 14th consecutive quarter that the specialty arm has seen revenue growth over 10%. As a result of the company’s decision to combing ABDC and ABSG into a single operating segment, the company eliminated the $1.5 billion in intrasegment revenue from its total segment revenue presentation.
The segment’s operating income of $377 million represented an 8.7% drop compared to the same quarter last year. The company attributed the dip in operating income to the decline in segment gross profit, which was impacted by lower price appreciated and a prior-year customer contract renewal.
In the company’s other segment — which encompasses its consulting services business, World Couriers and MWI Animal Health, it reported $1.7 billion in revenue, which was 106% higher than it was in the third quarter of 2016. The segment’s operating income increased 14.8% to $95 million.
Thursday’s results were accompanied by a change in the company’s 2017 guidance, which is now projecting revenue growth of about 5%, compared with its previous assumption of 5.5% to 6.5%.
The company recently concluded its Good Neighbor Pharmacy’s ThoughtSpot conference and trade show, where it unveiled its DIR fee estimator tool and a revamped ABC Order platform. It also recently opened a new distribution center in Seattle.