Cardinal Health (CAH) Tops Q1 Earnings, Misses On Sales

Cardinal Health Inc. (CAH – Free Report) reported first-quarter fiscal 2018 adjusted earnings of $1.09 per share, which beat the Zacks Consensus Estimate of $1.01. However, earnings declined 12.1% on a year-over-year basis.

Revenues increased 1.9% on a year-over-year basis to almost $32.64 billion but missed the Zacks Consensus Estimate of $33.43 billion. The stock has a Zacks Rank #4 (Sell).

Segmental Analysis

Pharmaceutical Segment: Pharmaceutical revenues inched up 1% to $28.92 billion on a year-over-year basis. The segment witnessed strong growth in the Specialty business and also gained a huge number of Pharmaceutical Distribution customers.

The segment witnessed a 13% drop in profits, thanks to generic pharmaceutical pricing and the company’s recent investments in its Pharmaceutical IT platform. However, solid performance by the Red Oak Sourcing platform has partially offset the negative effect.

Medical Segment: Revenues at the segment increased 14% to $3.72 billion primarily on higher contributions from new and existing customers.

Medical segment profits increased 1% to $129 million, courtesy of higher contributions from new and existing customers and acquisitions. However, lower contributions from the Veterans Affairs contract partially affected sales at the segment.

Cardinal Health, Inc. Price and Consensus

Cardinal Health, Inc. Price and Consensus | Cardinal Health, Inc. Quote

Major Highlights

In the reported quarter, Cardinal Health closed the acquisition of Medtronic’s (MDT – Free Report) Patient Recovery business for $6.1 billion in cash. Further, Cardinal Health launched ConnectSource, a new cloud-based patient engagement platform in the first quarter.

Cardinal Health entered into an agreement in the first quarter to distribute self-manufactured surgeon gloves directly in certain international markets.

The company also announced an agreement to make its Cordis subsidiary the exclusive distributor of Medinol coronary stents in the United States.

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Author: Travis Esquivel

Travis Esquivel is an engineer, passionate soccer player and full-time dad. He enjoys writing about innovation and technology from time to time.

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