AmerisourceBergen (ABC)
Q1 2013 Earnings Call
January 24, 2013 11:00 am ET
Executives
Barbara A. Brungess - Vice President of Corporate & Investor Relations
Steven H. Collis - Chief Executive Officer, President, Director and Chairman of Executive Committee
Tim G. Guttman - Chief Financial Officer, Principal Accounting Officer and Senior Vice President
Analysts
Thomas Gallucci - Lazard Capital Markets LLC, Research Division
Robert M. Willoughby - BofA Merrill Lynch, Research Division
Glen J. Santangelo - Crédit Suisse AG, Research Division
Robert P. Jones - Goldman Sachs Group Inc., Research Division
Steven Valiquette - UBS Investment Bank, Research Division
Lisa C. Gill - JP Morgan Chase & Co, Research Division
Ricky Goldwasser - Morgan Stanley, Research Division
John W. Ransom - Raymond James & Associates, Inc., Research Division
David Larsen - Leerink Swann LLC, Research Division
Charles Rhyee - Cowen and Company, LLC, Research Division
George Hill - Citigroup Inc, Research Division
Ross Muken - ISI Group Inc., Research Division
Presentation
Operator
Ladies and gentlemen, thank you for standing by, and welcome to the ABC Earnings Call. [Operator Instructions] As a reminder, today's call is being recorded. I'll now turn the conference over to Ms. Barbara Brungess. Please go ahead.
Barbara A. Brungess
Thank you, John. Good morning, everyone, and welcome to AmerisourceBergen's Earnings Conference Call covering our first quarter fiscal year 2013 results. I am Barbara Brungess, Vice President, Corporate and Investor Relations. And joining me today are Steve Collis, AmerisourceBergen President and CEO; and Tim Guttman, Senior Vice President and CFO.
During the conference call today, we will make some forward-looking statements about our business prospects and financial expectations. We remind you that there are many risk factors that could cause our actual results to differ materially from our current expectations. For a discussion of some key risk factors, we refer you to our SEC filings, including our 10-K report for fiscal 2012.
Also, AmerisourceBergen assumes no obligation to update the matters discussed in this conference call, and this call cannot be rebroadcast without the expressed permission of the company. As always, those connected by telephone will have an opportunity to ask questions after our opening remarks.
Now here is Steve Collis to begin our comments.
Steven H. Collis
Thank you, Barbara, and good morning, everyone. I am pleased to report that AmerisourceBergen delivered strong solid results in the first quarter of our fiscal year 2013. Our revenues were up 6% to $21.5 billion, and earnings per share were up 13% to $0.69. Our financial results were in line with our expectations and position us well to meet our objectives for the remainder of the year.
Importantly, the acquisitions we made last year contributed meaningfully to our results in the quarter, expanding our positions in the fastest growing segments of the market and further strengthening our foundation for sustainable growth.
AmerisourceBergen plays a significant role in an essential sector of the health care economy and is an important contributor to a growing and vibrant pharmaceutical industry. As I discussed at our Investor Day last month, we continue to expect that demographic trends and health care reform initiatives will expand coverage to the uninsured and should drive organic growth in our industry over the next several years.
In addition, launches of new pharmaceuticals, as well as expanded indications for existing drugs should further contribute to improving pharmaceutical sales trends. At the same time, cost efficiencies are expected by both government and private payers, and AmerisourceBergen's role in driving efficiency and innovation in the pharmaceutical supply chain is becoming ever more important.
With our diverse customer mix, we are fortunate to work with many participants in the health care market. We deal with both large and small provider and manufacture customers and believe we offer a compelling value proposition for all our chosen customer segments.
Our portfolio positions us to benefit in unique ways from health reform initiatives as organic industry growth draws demand across all our businesses. For example, our manufacture services business helps life-saving new therapies come to market quicker and more efficiently and helps ensure that patients have complete understanding of their reimbursement options, including manufacture resources that may be available to them. As our provider and retail customers face the challenge of both cost pressures and increased demand, our goal is for AmerisourceBergen to be seen as increasingly important resource in making the health care practice and businesses run as efficiently as possible without sacrificing excellence in patient care.
Historically, we have taken a very customer-centric approach to adding and developing our business lines. Simply put, we want to provide services that will be valued and paid for by our customer base. This guiding principle has been the driver of our long-term success and has helped direct our internal and external investments. As the health care industry faces great change and complexities in the future, AmerisourceBergen will continue to use our key strengths to drive growth by delivering important and innovative value to our customers.
While we face some headwinds in fiscal 2013, the resilience of our business and the investments we've made over the last several quarter give me confidence in the future prospects for our business and in our ability to meet our financial and business goals for fiscal year 2013. Furthermore, with the addition of the World Courier business and an increasingly global mindset of some of our manufacture partners, we see opportunities to expand some of our fastest-growing lines of business into certain international markets.
Turning now to our business units. The Pharmaceutical Distribution segment had strong revenue growth, but gross and operating margins were challenged by difficult year-over-year comparisons, particularly with respect to generics and by changing customer mix in AmerisourceBergen Drug Corporations. Operating income was down slightly in the quarter but in line with expectations.
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