Cardinal Health's stock falls on mixed quarterly results
By Eleanor Laise
Drug distributor boosts full-year profit guidance
Cardinal Health Inc.'s shares (CAH) fell 2% premarket Thursday after the company reported mixed results for its fiscal third quarter but raised its full-year profit outlook.
The drug distributor and lab-equipment provider reported net income of $258 million, or $1.05 per share, down from $345 million, or $1.34 per share, in the year-earlier period. Adjusted earnings per share came to $2.08 in the quarter, up from $1.74 a year earlier, to beat the FactSet consensus of $1.95. Revenues totaled $54.9 billion, up 9% from a year earlier, but missed the FactSet consensus of $56.05 billion.
Cardinal boosted its fiscal year 2024 adjusted earnings per share guidance to a range of $7.30 to $7.40, up from $7.20 to $7.35.
The company also provided preliminary guidance for fiscal year 2025, projecting adjusted earnings per share of at least $7.50.
Fiscal third-quarter sales in the company's pharmaceutical and specialty-solutions segment rose 9%, to $50.7 billion, driven by brand-name and specialty pharmaceutical sales growth from existing customers, Cardinal said.
In the global medical products and distribution segment, sales rose 4% from a year earlier, to $3.1 billion.
The quarter's results were "fairly solid across the board," Leerink Partners analysts said in a note Thursday. Providing a floor on fiscal 2025 guidance, the analysts said, "should be a positive sign for what remains a somewhat disliked stock."
Cardinal is looking to new customer wins and other growth efforts to help offset a recent blow to its drug distribution business. The stock slid late last month after the company said its drug distribution contracts with UnitedHealth Group Inc.'s (UNH) OptumRx, a major pharmacy-benefit manager, would not be renewed. The current contracts expire at the end of June. Sales to OptumRx accounted for 16% of Cardinal Health's revenue in fiscal year 2023, the company said.
Cardinal shares have gained 1.4% in the year to date, while the S&P 500 is up 5.2%.
-Eleanor Laise
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05-02-24 0804ET
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