Summary
Cardinal Health, Inc. reported robust revenue growth of 7% to $130.0 billion for fiscal year 2017, driven primarily by its Pharmaceutical segment. However, operating earnings saw a decrease of 14% on a GAAP basis and 4% on a non-GAAP basis, attributed to generic pharmaceutical customer pricing changes and the loss of a major distribution customer. Despite the earnings dip, the company maintained a strong financial position with cash and equivalents increasing significantly due to debt issuance and operating cash flow, partially offset by strategic investments. A major development during the year was the acquisition of Medtronic's Patient Recovery Business for $6.1 billion, which is expected to bolster the Medical segment's portfolio and revenue in the upcoming fiscal year, although it also introduced increased amortization and interest expenses. The company demonstrated a commitment to shareholder returns through a 16% increase in quarterly dividends and ongoing share repurchases. Looking ahead, Cardinal Health anticipates continued challenges in its Pharmaceutical segment due to pricing pressures but expects the Medtronic acquisition to drive growth in the Medical segment. The company's risk factors highlight competitive pressures, regulatory scrutiny, and the potential impact of economic conditions and customer concentration, particularly with its largest customer, CVS.
Financial Highlights
50 data points| Revenue | $129.98B |
| Cost of Revenue | $123.43B |
| Gross Profit | $6.54B |
| SG&A Expenses | $3.77B |
| Operating Income | $2.12B |
| Interest Expense | $201.00M |
| Net Income | $1.29B |
| EPS (Basic) | $4.06 |
| EPS (Diluted) | $4.03 |
| Shares Outstanding (Basic) | 317.00M |
| Shares Outstanding (Diluted) | 320.00M |
Key Highlights
- 1Total revenue reached $130.0 billion, a 7% increase year-over-year, mainly driven by pharmaceutical distribution customers.
- 2GAAP operating earnings decreased by 14% to $2.1 billion, while non-GAAP operating earnings decreased by 4% to $2.8 billion, primarily due to generic pricing changes and the loss of a large customer.
- 3GAAP diluted EPS decreased by 7% to $4.03, while non-GAAP diluted EPS increased by 3% to $5.40.
- 4The company completed a significant acquisition of Medtronic's Patient Recovery Business for $6.1 billion, expanding its Medical segment.
- 5Cash and equivalents increased substantially to $6.9 billion at fiscal year-end 2017, boosted by a $5.2 billion debt issuance.
- 6Dividends declared per common share increased by 16% to $1.80, and $600 million was used for share repurchases.
- 7The Pharmaceutical segment profit declined by 12% due to generic pharmaceutical customer pricing changes and customer loss, while the Medical segment profit increased by 25%.