Summary
Cardinal Health Inc. reported a 3% decrease in revenue for the three months ended September 30, 2012, totaling $25.9 billion, primarily due to brand-to-generic pharmaceutical conversions. Despite the revenue dip, gross margin saw a healthy 7% increase to $1.2 billion, and operating earnings rose 11% to $457 million. This improvement was driven by strong performance in the Pharmaceutical segment's generic programs and a $22 million income from antitrust litigation settlements. Net earnings from continuing operations increased by 15% to $272 million, with diluted EPS at $0.79. The company's liquidity remains strong, with cash and equivalents increasing to $2.4 billion, supported by robust operating cash flow. Looking ahead, management anticipates continued revenue decrease in fiscal 2013 within the Pharmaceutical segment due to ongoing generic conversions and the expiration of a major distribution contract with Express Scripts. The company continues to focus on balanced capital deployment, including dividends and share repurchases, demonstrating a commitment to shareholder value despite revenue headwinds in specific segments. The company is also actively managing legal and tax contingencies, including ongoing IRS audits.
Financial Highlights
48 data points| Revenue | $25.89B |
| Cost of Revenue | $24.73B |
| Gross Profit | $1.16B |
| SG&A Expenses | $690.00M |
| Operating Income | $457.00M |
| Interest Expense | $26.00M |
| Net Income | $271.00M |
| EPS (Basic) | $0.80 |
| EPS (Diluted) | $0.79 |
| Shares Outstanding (Basic) | 341.00M |
| Shares Outstanding (Diluted) | 344.00M |
Key Highlights
- 1Revenue for the quarter decreased by 3% to $25.9 billion, mainly due to brand-to-generic pharmaceutical conversions.
- 2Gross margin increased by 7% to $1.2 billion, and operating earnings grew by 11% to $457 million.
- 3Net earnings from continuing operations rose 15% to $272 million, with diluted EPS at $0.79.
- 4Cash and equivalents increased to $2.4 billion at the end of the quarter, driven by strong operating cash flow.
- 5The company recognized $22 million in income from settlements of class action antitrust claims.
- 6Management anticipates a continued revenue decrease in the Pharmaceutical segment for fiscal year 2013 due to generic conversions and contract expirations.
- 7The company repurchased $200 million of its Common Shares during the quarter and increased its quarterly dividend.