By Sneha S K
May 6 (Reuters) – Cencora pared down revenue growth outlook for the full year after missing Wall Street estimates for second-quarter results, sending shares down 18% on Wednesday morning.
The company said growth its U.S. healthcare business, its largest revenue source, was tempered by three main factors.
Manufacturers cutting prices on branded drugs shaved $2 billion off revenue in the quarter, Cencora said. The loss of an oncology customer and a grocery customer in 2025 added to the pressure.
The company also did not fully anticipate how quickly a big mail‑order pharmacy customer would shift to branded products from generic medicines, slowing down revenue growth for the year, CFO James Cleary said.
Slower revenue growth in the U.S. business led Cencora to cut its revenue growth forecast for the full year to 4%-6% from its prior view of 7%-9% growth.
U.S. healthcare revenue rose 2.9% to $68.8 billion in the three months ended March 31. Analysts on an average expected revenue of $71.26 billion for the unit, according to data compiled by LSEG.
Total quarterly revenue of $78.4 billion missed analysts’ estimates of $81.09 billion.
“We believe this result (and particularly the deceleration in U.S. Healthcare Solutions growth) falls short of investor expectations,” said J.P.Morgan analyst Lisa Gill.
Cencora, however, raised its annual adjusted profit forecast to $17.65-$17.90 per share, higher than its previous expectation of $17.45-$17.75 per share. Analysts were expecting a profit of $17.60 per share.
Peer Cardinal Health also missed Wall Street expectations for quarterly revenue last week, but raised its profit forecast for the third time in the past four months.
“Despite noise today, given some transitory items causing our results to be below expectations, we remain on track to deliver strong guidance for fiscal 2026,” Cleary said.
The company earned a profit of $4.75 per share on an adjusted basis, missing estimates of $4.81 per share.
Cencora has been narrowing its focus on drug distribution, divesting its non-core businesses and doubling down on its core operations to drive long-term performance.
(Reporting by Sneha S K in Bengaluru; Editing by Joyjeet Das)
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