economy
We're lifting our price target on Cardinal Health after issuing rosy profit guidance
The quarter wasn't totally clean, but strong profitability matters the most.
TL;DR
- Cardinal Health provided strong full-year earnings guidance, surpassing expectations.
- The company reported revenue of $63.67 billion for the three months ending June 30, missing estimates, but adjusted EPS came in at $2.60, exceeding consensus.
- Cardinal Health is increasing its focus on high-margin areas like specialty pharmaceuticals and direct-to-patient delivery.
- The Pharmaceutical and Specialty Solutions segment, the largest, saw revenue growth driven by branded and specialty pharmaceutical sales.
- The Global Medical Products and Distribution segment benefited from tariff refunds, but profitability remained strong even without this impact.
- The 'Other' segment, the fastest-growing unit, showed segment margin expansion.
- Cardinal Health is guiding for fiscal 2027 adjusted earnings growth of 13% to 15%, higher than anticipated by analysts.
- Free cash flow is expected to be between $3.5 billion and $4 billion, exceeding consensus estimates.