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Cardinal Health (CAH) Q1 Earnings and Revenues Top Estimates
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Cardinal Health, Inc. (CAH - Free Report) reported first-quarter fiscal 2023 adjusted earnings of $1.20 per share (EPS), which beat the Zacks Consensus Estimate of 96 cents by 25%. The bottom line, however, declined 7% year over year.
GAAP earnings per share in the quarter were 40 cents compared with the year-ago quarter’s earnings of 94 cents per share.
Revenue Details
Revenues improved 13% on a year-over-year basis to $49.6 billion. The top line outpaced the Zacks Consensus Estimate by 5.3%.
Segmental Analysis
Pharmaceutical Segment
In the fiscal first quarter, pharmaceutical revenues amounted to $45.8 billion, up 15% on a year-over-year basis. The performance highlights branded pharmaceutical sales growth from existing and net new Pharmaceutical Distribution and Specialty Solutions customers.
Pharmaceutical profit was $431 million, up 6% on a year-over-year basis. The upside was driven by generics program performance along with a higher contribution from the brand sales mix, which was partially offset by rising supply chain costs.
Medical Segment
In the quarter under review, revenues at this segment fell 9% to $3.8 billion due to the divestiture of the Cordis business as well as a decrease in product and distribution volumes.
The company reported a loss of $8 million in the Medical segment against a profit of $123 million in the year-ago quarter. The company recorded a loss during the quarter, primarily due to net inflationary impacts on products and distribution.
Margin Analysis
Gross profit was down 1.7% year over year to $1.61 billion.
Cardinal Health, Inc. Price, Consensus and EPS Surprise
As a percentage of revenues, the gross margin in the reported quarter was 3.3%, down approximately 40 basis points (bps) on a year-over-year basis.
Distribution, selling, general and administrative expenses totaled $1.2 billion, up 7.5% year over year.
The company reported an operating income of $137 million in the quarter under review compared with the year-ago quarter’s income of $415 million.
Financial Update
The company exited the quarter with cash and cash equivalents of $3.49 billion, compared with $4.72 billion in the fiscal fourth quarter of 2022.
Cumulative net cash provided by operating activities totaled $23 billion at the end of the fiscal first quarter, compared with net cash used of $646 million in the year-ago period.
2023 Guidance Maintained
Cardinal Health reiterated its fiscal 2023 view. The company anticipates adjusted earnings per share between $5.05 and $5.40. The Zacks Consensus Estimate is pegged at $5.20 per share.
Conclusion
Cardinal Health exited the fiscal first quarter on a strong note with better-than-expected earnings and revenues. The company witnessed revenue growth in its Pharmaceutical segment in the quarter under review.
However, intense competition and customer concentration are concerns. Weakness in the Medical segment is a woe. Contraction in gross margin also remains a headwind.
Zacks Rank and Stocks to Consider
Currently, Cardinal Health has a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader medical space that have announced quarterly results are Elevance Health, Inc. (ELV - Free Report) , Medpace Holdings, Inc. (MEDP - Free Report) and Merit Medical Systems, Inc. (MMSI - Free Report) .
Elevance Health, carrying a Zacks Rank #2 (Buy), reported third-quarter 2022 adjusted EPS of $7.53, which beat the Zacks Consensus Estimate by 6.1%. Revenues of $39.63 billion outpaced the consensus mark by 1.3%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Elevance Health has an earnings yield of 5.5% against the industry’s (2.3%). ELV’s earnings surpassed estimates in all the trailing four quarters, the average being 4.1%.
Medpace Holdings, having a Zacks Rank #1, reported third-quarter 2022 adjusted EPS of $2.05, which beat the Zacks Consensus Estimate by 39.5%. Revenues of $384 million outpaced the consensus mark by 8.1%.
Medpace Holdings has an estimated growth rate of 22.7% for 2022. MEDP’s earnings surpassed estimates in the trailing four quarters, the average being 22.04%.
Merit Medical, flaunting a Zacks Rank #1, reported third-quarter 2022 adjusted EPS of 64 cents, which beat the Zacks Consensus Estimate by 20.8%. Revenues of $287.2 million outpaced the consensus mark by 5.2%.
Merit Medical has an estimated long-term growth rate of 11%. MMSI’s earnings surpassed estimates in all the trailing four quarters, the average being 25.4%.
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Cardinal Health (CAH) Q1 Earnings and Revenues Top Estimates
Cardinal Health, Inc. (CAH - Free Report) reported first-quarter fiscal 2023 adjusted earnings of $1.20 per share (EPS), which beat the Zacks Consensus Estimate of 96 cents by 25%. The bottom line, however, declined 7% year over year.
GAAP earnings per share in the quarter were 40 cents compared with the year-ago quarter’s earnings of 94 cents per share.
Revenue Details
Revenues improved 13% on a year-over-year basis to $49.6 billion. The top line outpaced the Zacks Consensus Estimate by 5.3%.
Segmental Analysis
Pharmaceutical Segment
In the fiscal first quarter, pharmaceutical revenues amounted to $45.8 billion, up 15% on a year-over-year basis. The performance highlights branded pharmaceutical sales growth from existing and net new Pharmaceutical Distribution and Specialty Solutions customers.
Pharmaceutical profit was $431 million, up 6% on a year-over-year basis. The upside was driven by generics program performance along with a higher contribution from the brand sales mix, which was partially offset by rising supply chain costs.
Medical Segment
In the quarter under review, revenues at this segment fell 9% to $3.8 billion due to the divestiture of the Cordis business as well as a decrease in product and distribution volumes.
The company reported a loss of $8 million in the Medical segment against a profit of $123 million in the year-ago quarter. The company recorded a loss during the quarter, primarily due to net inflationary impacts on products and distribution.
Margin Analysis
Gross profit was down 1.7% year over year to $1.61 billion.
Cardinal Health, Inc. Price, Consensus and EPS Surprise
Cardinal Health, Inc. price-consensus-eps-surprise-chart | Cardinal Health, Inc. Quote
As a percentage of revenues, the gross margin in the reported quarter was 3.3%, down approximately 40 basis points (bps) on a year-over-year basis.
Distribution, selling, general and administrative expenses totaled $1.2 billion, up 7.5% year over year.
The company reported an operating income of $137 million in the quarter under review compared with the year-ago quarter’s income of $415 million.
Financial Update
The company exited the quarter with cash and cash equivalents of $3.49 billion, compared with $4.72 billion in the fiscal fourth quarter of 2022.
Cumulative net cash provided by operating activities totaled $23 billion at the end of the fiscal first quarter, compared with net cash used of $646 million in the year-ago period.
2023 Guidance Maintained
Cardinal Health reiterated its fiscal 2023 view. The company anticipates adjusted earnings per share between $5.05 and $5.40. The Zacks Consensus Estimate is pegged at $5.20 per share.
Conclusion
Cardinal Health exited the fiscal first quarter on a strong note with better-than-expected earnings and revenues. The company witnessed revenue growth in its Pharmaceutical segment in the quarter under review.
However, intense competition and customer concentration are concerns. Weakness in the Medical segment is a woe. Contraction in gross margin also remains a headwind.
Zacks Rank and Stocks to Consider
Currently, Cardinal Health has a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader medical space that have announced quarterly results are Elevance Health, Inc. (ELV - Free Report) , Medpace Holdings, Inc. (MEDP - Free Report) and Merit Medical Systems, Inc. (MMSI - Free Report) .
Elevance Health, carrying a Zacks Rank #2 (Buy), reported third-quarter 2022 adjusted EPS of $7.53, which beat the Zacks Consensus Estimate by 6.1%. Revenues of $39.63 billion outpaced the consensus mark by 1.3%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Elevance Health has an earnings yield of 5.5% against the industry’s (2.3%). ELV’s earnings surpassed estimates in all the trailing four quarters, the average being 4.1%.
Medpace Holdings, having a Zacks Rank #1, reported third-quarter 2022 adjusted EPS of $2.05, which beat the Zacks Consensus Estimate by 39.5%. Revenues of $384 million outpaced the consensus mark by 8.1%.
Medpace Holdings has an estimated growth rate of 22.7% for 2022. MEDP’s earnings surpassed estimates in the trailing four quarters, the average being 22.04%.
Merit Medical, flaunting a Zacks Rank #1, reported third-quarter 2022 adjusted EPS of 64 cents, which beat the Zacks Consensus Estimate by 20.8%. Revenues of $287.2 million outpaced the consensus mark by 5.2%.
Merit Medical has an estimated long-term growth rate of 11%. MMSI’s earnings surpassed estimates in all the trailing four quarters, the average being 25.4%.