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Cardinal Health (CAH) Beats on Q4 Earnings, Ups '24 EPS View
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Cardinal Health, Inc. (CAH - Free Report) reported fourth-quarter fiscal 2024 adjusted earnings per share (EPS) of $1.84, which beat the Zacks Consensus Estimate of $1.72 by 7%. The bottom line also improved 29% year over year.
GAAP EPS in the quarter was 96 cents against a loss of 22 cents per share in the year-ago period.
Revenue Details
Sales improved 12% on a year-over-year basis to $59.9 billion. The top line also beat the Zacks Consensus Estimate by 2%.
Segmental Analysis
Pharmaceutical and Specialty Solutions Segment
In the reported quarter, pharmaceutical revenues increased 13% to $55.6 billion on a year-over-year basis. The performance highlights branded pharmaceutical sales growth from existing Pharmaceutical Distribution and Specialty Solutions customers.
Pharmaceutical profit totaled $482 million, up 8% from the year-ago quarter’s level. The upside was driven by generics program performance.
Global Medical Products and Distribution Segment
Revenues in this segment totaled $3.1 billion, up 2% year over year, driven by growth volume from existing customers.
The segment reported a profit of $47 million compared with $7 million in the year-ago quarter. This upside was driven by an improvement in net inflationary impacts, including mitigation initiatives.
Other
This segment includes three operating segments — at-Home Solutions, Nuclear and Precision Health Solutions and OptiFreight Logistics. Sales totaled $1.2 billion in the quarter, up 15% year over year.
The segment’s profit amounted to $111 million, up 11% from the year-ago quarter’s level. The upside was driven by robust performance in OptiFreight Logistics.
Cardinal Health, Inc. Price, Consensus and EPS Surprise
Gross profit increased 5% year over year to $1.88 billion.
As a percentage of revenues, the gross margin in the reported quarter was 3.1%, down 20 basis points year over year.
Distribution, selling, general and administrative expenses totaled $1.28 billion, up 2% year over year.
Operating income amounted to $401 million compared with $111 million in the year-ago quarter. Adjusted operating income increased 14% year over year to $605 million.
Financial Update
The company exited the reported quarter with cash and cash equivalents of $5.13 billion compared with $3.72 billion in the fiscal third quarter of 2024.
Cumulative net cash provided by operating activities totaled $2.08 billion compared with $871 million in the year-ago period.
2025 View Updated
Cardinal Health raised its fiscal 2025 guidance for earnings from the previously announced preliminary outlook for the same. The company now anticipates adjusted EPS to be between $7.55 and $7.70, up from the previous guidance of at least $7.50. The Zacks Consensus Estimate for the same is pegged at $7.55.
The company expects revenues from its Pharmaceutical segment to decline 4-6% year over year. The anticipated decline reflects a $39 billion revenue headwind due to the OptumRx contract expiration in June 2024. Segmental profit is likely to increase 1-3% from the previous guidance of at least 1%.
Revenues from the Medical segment are estimated to grow 3-5%. Segmental profit is expected to be nearly $175 million in the quarter.
Revenues from the Other segment are likely to grow 10-12% from the previous guidance of nearly 10%. Segmental profit is likely to grow nearly 10%.
Conclusion
Cardinal Health exited the fiscal fourth quarter on a positive note, wherein earnings and revenues beat their respective Zacks Consensus Estimate. The company also witnessed year-over-year revenue growth across all its sectors.
Shares of the company were up 6.2% in pre-market trading following better-than-expected results. The company’s shares have risen 1.8% year to date against the industry’s decline of 0.9%. The broader S&P 500 Index has moved up 14.1% in the same period.
Image Source: Zacks Investment Research
However, intense competition and customer concentration are concerning.
Zacks Rank and Stocks to Consider
Cardinal Health carries a Zacks Rank #3 (Hold) at present.
DaVita has an estimated long-term growth rate of 17.5%. DVA’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 24.2%.
DaVita’s shares have risen 39.2% year to date compared with the industry’s 11% growth.
Aspen Technology has an estimated long-term growth rate of 13.1%. AZPN’s earnings surpassed estimates in two of the trailing four quarters and missed the same twice, the average surprise being 4.24%.
Shares of Aspen Technology have lost 3.1% year to date against the industry’s 9.2% growth.
Universal Health Services has an estimated long-term growth rate of 19%. UHS' earnings surpassed estimates in each of the trailing four quarters, the average surprise being 14.58%.
The company’s shares have risen 44.7% year to date compared with the industry’s 34.9% growth.
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Cardinal Health (CAH) Beats on Q4 Earnings, Ups '24 EPS View
Cardinal Health, Inc. (CAH - Free Report) reported fourth-quarter fiscal 2024 adjusted earnings per share (EPS) of $1.84, which beat the Zacks Consensus Estimate of $1.72 by 7%. The bottom line also improved 29% year over year.
GAAP EPS in the quarter was 96 cents against a loss of 22 cents per share in the year-ago period.
Revenue Details
Sales improved 12% on a year-over-year basis to $59.9 billion. The top line also beat the Zacks Consensus Estimate by 2%.
Segmental Analysis
Pharmaceutical and Specialty Solutions Segment
In the reported quarter, pharmaceutical revenues increased 13% to $55.6 billion on a year-over-year basis. The performance highlights branded pharmaceutical sales growth from existing Pharmaceutical Distribution and Specialty Solutions customers.
Pharmaceutical profit totaled $482 million, up 8% from the year-ago quarter’s level. The upside was driven by generics program performance.
Global Medical Products and Distribution Segment
Revenues in this segment totaled $3.1 billion, up 2% year over year, driven by growth volume from existing customers.
The segment reported a profit of $47 million compared with $7 million in the year-ago quarter. This upside was driven by an improvement in net inflationary impacts, including mitigation initiatives.
Other
This segment includes three operating segments — at-Home Solutions, Nuclear and Precision Health Solutions and OptiFreight Logistics. Sales totaled $1.2 billion in the quarter, up 15% year over year.
The segment’s profit amounted to $111 million, up 11% from the year-ago quarter’s level. The upside was driven by robust performance in OptiFreight Logistics.
Cardinal Health, Inc. Price, Consensus and EPS Surprise
Cardinal Health, Inc. price-consensus-eps-surprise-chart | Cardinal Health, Inc. Quote
Margin Analysis
Gross profit increased 5% year over year to $1.88 billion.
As a percentage of revenues, the gross margin in the reported quarter was 3.1%, down 20 basis points year over year.
Distribution, selling, general and administrative expenses totaled $1.28 billion, up 2% year over year.
Operating income amounted to $401 million compared with $111 million in the year-ago quarter. Adjusted operating income increased 14% year over year to $605 million.
Financial Update
The company exited the reported quarter with cash and cash equivalents of $5.13 billion compared with $3.72 billion in the fiscal third quarter of 2024.
Cumulative net cash provided by operating activities totaled $2.08 billion compared with $871 million in the year-ago period.
2025 View Updated
Cardinal Health raised its fiscal 2025 guidance for earnings from the previously announced preliminary outlook for the same. The company now anticipates adjusted EPS to be between $7.55 and $7.70, up from the previous guidance of at least $7.50. The Zacks Consensus Estimate for the same is pegged at $7.55.
The company expects revenues from its Pharmaceutical segment to decline 4-6% year over year. The anticipated decline reflects a $39 billion revenue headwind due to the OptumRx contract expiration in June 2024. Segmental profit is likely to increase 1-3% from the previous guidance of at least 1%.
Revenues from the Medical segment are estimated to grow 3-5%. Segmental profit is expected to be nearly $175 million in the quarter.
Revenues from the Other segment are likely to grow 10-12% from the previous guidance of nearly 10%. Segmental profit is likely to grow nearly 10%.
Conclusion
Cardinal Health exited the fiscal fourth quarter on a positive note, wherein earnings and revenues beat their respective Zacks Consensus Estimate. The company also witnessed year-over-year revenue growth across all its sectors.
Shares of the company were up 6.2% in pre-market trading following better-than-expected results. The company’s shares have risen 1.8% year to date against the industry’s decline of 0.9%. The broader S&P 500 Index has moved up 14.1% in the same period.
Image Source: Zacks Investment Research
However, intense competition and customer concentration are concerning.
Zacks Rank and Stocks to Consider
Cardinal Health carries a Zacks Rank #3 (Hold) at present.
Some better-ranked stocks in the broader medical space that have announced quarterly results are DaVita (DVA - Free Report) , Aspen Technology (AZPN - Free Report) and Universal Health Services (UHS - Free Report) , each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
DaVita has an estimated long-term growth rate of 17.5%. DVA’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 24.2%.
DaVita’s shares have risen 39.2% year to date compared with the industry’s 11% growth.
Aspen Technology has an estimated long-term growth rate of 13.1%. AZPN’s earnings surpassed estimates in two of the trailing four quarters and missed the same twice, the average surprise being 4.24%.
Shares of Aspen Technology have lost 3.1% year to date against the industry’s 9.2% growth.
Universal Health Services has an estimated long-term growth rate of 19%. UHS' earnings surpassed estimates in each of the trailing four quarters, the average surprise being 14.58%.
The company’s shares have risen 44.7% year to date compared with the industry’s 34.9% growth.