Summary
Cardinal Health, Inc. (CAH) reported its financial results for the quarter ended December 31, 2010. The company experienced revenue growth, driven primarily by its Pharmaceutical segment, which saw increased profit due to new generic launches and improved sourcing programs. However, the Medical segment faced headwinds, with flat profit for the quarter and a decline year-to-date, attributed to rising commodity costs and a strong prior-year flu season. Significant strategic initiatives were undertaken during the period, including substantial acquisitions in the pharmaceutical distribution space in both the US (Kinray) and China (Yong Yu), along with the acquisition of P4 Healthcare to bolster specialty pharmaceutical services. These acquisitions are expected to contribute positively to earnings in the latter half of fiscal 2011. The company also continued to divest its remaining stake in CareFusion, generating a gain and strengthening its balance sheet.
Financial Highlights
49 data points| Revenue | $25.37B |
| Cost of Revenue | $24.38B |
| Gross Profit | $994.00M |
| SG&A Expenses | $607.00M |
| Operating Income | $343.90M |
| Interest Expense | $21.90M |
| Net Income | $215.00M |
| EPS (Basic) | $0.62 |
| EPS (Diluted) | $0.61 |
| Shares Outstanding (Basic) | 347.60M |
| Shares Outstanding (Diluted) | 350.70M |
Key Highlights
- 1Revenue increased by 2% to $25.4 billion for the quarter and was flat at $49.8 billion for the six-month period, compared to the prior year.
- 2Pharmaceutical segment profit grew significantly (11% for the quarter, 25% year-to-date), driven by generic launches and sourcing programs.
- 3The company completed three significant acquisitions during the period: Kinray for $1.3 billion, Yong Yu for $470 million, and P4 Healthcare for $506 million.
- 4Cash and equivalents decreased to $1.3 billion from $2.8 billion due to $2.3 billion used for acquisitions, partially offset by the sale of remaining CareFusion investment and debt issuance.
- 5Medical segment profit was flat for the quarter but down 15% year-to-date, impacted by rising commodity costs and prior-year flu season strength.
- 6The company disposed of its remaining investment in CareFusion, recognizing a $74.8 million gain for the six-month period.
- 7Diluted earnings per share from continuing operations were $0.61 for the quarter and $1.45 for the six-month period.