Q1 2012 Earnings Call
January 26, 2012 11:00 am ET
Steven H. Collis - Chief Executive Officer, President, Director and Chairman of Executive & Finance Committee
Barbara A. Brungess - Vice President of Corporate & Investor Relations
Michael D. Dicandilo - Chief Financial Officer, Principal Accounting Officer and Executive Vice President
Matthew Coffina - Morningstar Inc., Research Division
Lisa C. Gill - JP Morgan Chase & Co, Research Division
Eric W. Coldwell - Robert W. Baird & Co. Incorporated, Research Division
Kipp R.F. Davis - Barclays Capital, Research Division
George Hill - Citigroup Inc, Research Division
Robert C. Jones - Goldman Sachs Asset Management, L.P.
Thomas Gallucci - Lazard Capital Markets LLC, Research Division
Steven Valiquette - UBS Investment Bank, Research Division
Ricky Goldwasser - Morgan Stanley, Research Division
Charles Rhyee - Cowen and Company, LLC, Research Division
Albert J. Rice - Susquehanna Financial Group, LLLP, Research Division
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Ladies and gentlemen, thank you for standing by. Welcome to the AmerisourceBergen first quarter earnings. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to our host, Barbara Brungess. Please go ahead.
Barbara A. Brungess
Good morning, everyone, and welcome to AmerisourceBergen's earnings conference call covering our fiscal 2012 first quarter results. I'm Barbara Brungess, Vice President of Corporate and Investor Relations. And joining me today are Steve Collis, AmerisourceBergen President and CEO; and Mike Dicandilo, Executive 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 2011.
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 phone 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 solid results in the first quarter of our fiscal year 2012.
Our revenues were up 2% to $20.4 billion. Earnings per share were up 9% to $0.62. We generated $432 million in operating cash flow and we repurchased $128 million of our shares. Our financial results were in line with our expectations and position us well to meet our objectives for the remainder of the year.
Our excellent cash generation and strong balance sheet provide us with outstanding financial flexibility and give us the ability to fund our strategic initiatives and grow our business.
AmerisourceBergen is fortunate to be an important part of a growing industry. As I discussed at our Investor Day in December, demographics in the expansion of health care coverage should you drive organic growth in our industry over the next several years. In addition, launches of new pharmaceuticals as well as new indications for existing drugs should also drive sales growth. The tremendous wave of over 30 brand to generic drug conversions that we expect in our fiscal 2012 as well as additional conversions expected in subsequent years will mitigate the top line dollar growth in our industry. It will drive tremendous value for wholesalers, healthcare providers and patients alike.
These trends bode well for AmerisourceBergen in particular. Our diverse revenue base positions us well to benefit from organic growth driven by demographics as well as from the influx of the uninsured over the next few years. Our customer mix also puts us in a favorable position to benefit from the historic influx of generics. In addition, cost-containment efforts underway by the federal government and other payers drive demand for our services most notably in our Consulting Services group.
Today, we are more entrenched than ever before with our manufactured customers and we expect that to continue to increase. As our provider customers face reimbursement and other challenges, they increasingly turn to AmerisourceBergen for help in making their healthcare practices run as efficiently as possible without sacrificing excellent patient care.
Over the last several months, a few large contracts in our industry have been the subject of much dialogue for various different reasons. Over all, however, the market continues to be competitive but stable. We continue to participate in discussions that are important to our business, our industry and our customers in Washington, D.C., educating lawmakers about our business and the value we and our customers provide to the healthcare system.
I've discussed our core tenants several times over the last year but they continue to drive our efforts and that's bare repeating. Firstly, collaborate to drive innovation for all stakeholders, increasing customer and supplier value, expanding our business in targeted markets, maximizing operating efficiency and maintain a high-performance culture. Our associates creatively tackle challenges and identify new opportunities to add value on a daily basis. They'll focus on meeting our objectives for the year, both in terms of the service we provide to customers and suppliers and in our financial performance, and I'm honored to work with beside them.
Turning now to our business units. AmerisourceBergen Drug Corporation had solid revenue growth in the quarter, up 2%. We had positive revenue growth in both retail and institutional segments, even with the previously discussed last of the large retail -- retail customer in September of 2011. Our ultimate side segment was particularly strong in the quarter and hospitals and independents had very solid growth.