Shares of AmerisourceBergen Corp. (ABC) dipped 3.6% yesterday, following the decision of the company's Executive Vice President and Chief Financial Officer (:CFO) Michael D. DiCandilo to vacate his office immediately. Mr. DiCandilo, who resigned to pursue other interests, was with AmerisourceBergen for 21 years, including his 10 year tenure of serving as the CFO of the company.
The company stated that Tim G. Guttman, the company's Vice President and Corporate Controller since 2002, will immediately take over as the acting CFO. Mr. Guttman was earlier the Vice President, Finance of Syncor International, and has held financial planning and financial services managerial positions at Disney Consumer Products, Pizza Hut, Inc. and Pepsico Inc. (PEP).
2012 Guidance Backed
Following the news, AmerisourceBergen reaffirmed its guidance for fiscal 2012 (ending September 30). It continues to expect earnings in the range of $2.74 to $2.84 per share. The Zacks Consensus Estimate of $2.81 is pegged at the higher end of the guidance range.
The company maintains the flat-to-modest revenue growth projection, and intends to spend about $400 million on share repurchases in fiscal 2012.
Further, AmerisourceBergen expects operating margin to grow in the high single-digit to low double-digit basis points range. Free cash flow, which includes capital expenditures of about $150 million, is expected in the range of $700 to $800 million.
Neutral on AmerisourceBergen
We currently have a Neutral recommendation on AmerisourceBergen. The stock carries a Zacks #3 Rank (Hold rating) in the short-run. We believe the company is well-positioned for growth given the strong performance of its generics business. AmerisourceBergen boasts of a robust plasma and vaccine business, which are expected to contribute strong revenues in the coming quarters.
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