Summary
Cardinal Health Inc. reported its financial results for the quarter and six months ended December 31, 2008. The company experienced revenue growth driven by pharmaceutical price appreciation and increased volume, partially offset by customer losses. While operating earnings saw a modest increase for the quarter, they declined year-over-year for the six-month period. Significant factors influencing these results include ongoing restructuring charges related to a planned spin-off of its clinical and medical products businesses and other operational efficiencies. The company's balance sheet reflects a decrease in cash and equivalents, largely due to working capital changes, debt repayments, and capital expenditures. The company is also navigating a complex tax environment with ongoing IRS audits. A major strategic development is the announced planned spin-off of its clinical and medical products businesses, expected by mid-2009, which is incurring significant expenditures and requires considerable management attention. This move aims to streamline operations and enhance shareholder value by creating two distinct entities.
Financial Highlights
30 data points| Revenue | $24.12B |
| Cost of Revenue | $23.20B |
| Gross Profit | $915.10M |
| SG&A Expenses | $578.50M |
| Operating Income | $313.10M |
| Interest Expense | $22.20M |
| Net Income | $316.50M |
| EPS (Basic) | $0.48 |
| EPS (Diluted) | $0.47 |
| Shares Outstanding (Basic) | 357.30M |
| Shares Outstanding (Diluted) | 360.30M |
Key Highlights
- 1Revenue increased by 8% for the quarter and 9% for the six months, driven by pharmaceutical price appreciation, volume growth, and acquisitions, despite customer losses.
- 2Operating earnings saw a 4% increase for the three-month period but a 4% decrease for the six-month period compared to the prior year.
- 3Net earnings decreased by 3% for the quarter and 10% for the six months compared to the prior year.
- 4The company announced a planned spin-off of its clinical and medical products businesses, expected by mid-2009, which is incurring significant associated expenditures.
- 5Cash used in operating activities was $81 million for the six months ended December 31, 2008, primarily due to working capital changes, contrasting with cash provided in the prior year.
- 6Inventory levels increased significantly by $1.7 billion for the six-month period.
- 7The company is subject to ongoing IRS audits related to trade receivables, transfer pricing, and intellectual property, with potential tax liabilities excluding penalties and interest totaling $598 million.