Question-and-Answer Session
Operator
Thank you, we will now begin the Question and Answer session. (Operator Instructions) Our first question will be from Lisa Gill of JPMorgan. Your line is open. You may now ask your question.
Lisa Gill - JPMorgan
Great, thank you, and good afternoon. Jeff, just walking back through some thoughts around the guidance that you just gave, obviously you raised it by $0.07. In my estimate OTN will cost you maybe $0.03 to $0.04 which would put overall raise from the initial guidance in my mind of $0.10 to $0.11 of which about $0.06 is coming from tax. So as I kind of step back and say 4% to 5% of it is from operations and this quarter you beat consensus on an operations side by about $0.06.
How should I be thinking about the next couple of quarters? Is there something that I am missing here? And when we think about drug distribution, is it the fact that the price increases came through in July and maybe we won't see as much in January? I know you don't like to answer questions about guidance but maybe if you can just help me to better understand this.
Jeff Campbell
No, Lisa in fact I think you have got the components fairly well laid out. The way I would go through it relative to our initial guidance is clearly we've had a strong first half performance, particularly in our U.S. pharmaceutical distribution business.
And our view is that some portion of that strength is just timing. So it's borrowing from what we thought would happen in the back half and putting it into the front half and some portion of it is reflective of real continued strength that will show up in our year end results.
You got a balance that against OTN, which we closed frankly more quickly than we had initially thought. So we'll now have about two full quarters of dilution from OTN. And while there's lots of uncertainty there and our goal is to make the integration happen very quickly and get at the synergies the dilution in our estimate for fiscal '08 is probably more in the, around $0.06 range.
And this number is probably somewhat similar for '09. Certainly our goal is to beat that but that's what's in our thinking as we go through rest of the year. And then as you say you've got the tax good guy which does add about $0.05. So it's the interplay of those effects that leads us to the range that we've given you.
- To read the full transcript on Seeking Alpha, click here »
