AmerisourceBergen 2Q Net Up 7% On Drug Sales; Upgrades '09 Target

   DOW JONES NEWSWIRES 
 

AmerisourceBergen Co.'s (ABC) fiscal second-quarter net income rose 7% amid a double-digit increase in generic drug sales and a strong performance from the company's higher-margin specialty distribution business.

The drug wholesaler also raised its 2009 earnings forecast amid expectations for 6% to 7% fewer shares outstanding, projecting earnings of $3.18 to $3.30 a share, up from its prior target of $3.08 to $3.25 a share. Revenue is still expected to grow 1% to 3%.

Lower hospital spending and drug-store closures have made it more difficult for AmerisourceBergen to weather the recession. The company faces more pressure as drug manufacturers consolidate operations, limiting AmerisourceBergen's leverage in packaging and distribution negotiations.

For the quarter ended March 31, the pharmaceutical-services company posted net income of $143.4 million, or 94 cents a share, up from $133.9 million, or 82 cents a share, a year ago.

Revenue slumped 2.5% to $17.3 billion amid the loss of the direct-to-warehouse business last July and one less business day in this year's quarter.

Analysts polled by Thomson Reuters were looking for earnings of 89 cents on revenue of $17.9 billion.

Gross margin climbed to 3.19% from 3.03% on strong generic-drug sales.

AmerisourceBergen shares closed Wednesday at $34.75. There was no premarket trading.

-By Katherine E. Wegert, Dow Jones Newswires; 201-938-5294; [e-mail]