Summary
Cardinal Health, Inc. (CAH) reported its third-quarter 2015 financial results for the period ending December 31, 2014. The company demonstrated revenue growth, driven primarily by its Pharmaceutical segment, with a notable increase in revenue for both the three-month and six-month periods compared to the prior year. This growth was attributed to new and existing distribution customers. Gross margin also saw an increase, reflecting this revenue expansion and strong performance in generic programs, though partially offset by customer pricing changes and the impact of new hepatitis C drugs. While operating earnings showed a modest increase, the company experienced a significant loss on the extinguishment of debt during the quarter due to debt refinancing activities. Earnings from continuing operations for the six-month period declined year-over-year, impacted by the debt extinguishment and prior-year tax benefits. The company maintained a strong liquidity position with a substantial cash and equivalents balance and active share repurchase programs, alongside continued debt management and refinancing efforts.
Financial Highlights
48 data points| Revenue | $25.54B |
| Cost of Revenue | $24.08B |
| Gross Profit | $1.45B |
| SG&A Expenses | $815.00M |
| Operating Income | $546.00M |
| Interest Expense | $36.00M |
| Net Income | $289.00M |
| EPS (Basic) | $0.87 |
| EPS (Diluted) | $0.86 |
| Shares Outstanding (Basic) | 331.00M |
| Shares Outstanding (Diluted) | 334.00M |
Key Highlights
- 1Revenue increased by 15% to $25.5 billion for the three months ended December 31, 2014, and by 6% to $49.6 billion for the six months ended December 31, 2014, primarily driven by pharmaceutical distribution customer growth.
- 2Gross margin increased by 8% to $1.5 billion for the three months and 7% to $2.8 billion for the six months ended December 31, 2014, supported by revenue growth and generic programs, but impacted by customer pricing and new product mix.
- 3Operating earnings saw a modest increase of 5% to $546 million for the three months and 2% to $1.0 billion for the six months ended December 31, 2014, despite higher litigation charges.
- 4A significant loss of $60 million on extinguishment of debt was recorded in the three months ended December 31, 2014, due to the redemption of outstanding notes as part of debt refinancing.
- 5Earnings from continuing operations decreased by 10% to $555 million for the six months ended December 31, 2014, influenced by the debt extinguishment loss and prior-year tax benefits.
- 6The company reported $1.0 billion in net cash provided by operating activities for the six months ended December 31, 2014, while also executing $684 million in share repurchases and paying $233 million in dividends.
- 7Cardinal Health established Red Oak Sourcing, LLC, a generic pharmaceutical sourcing venture with CVS Health Corporation, in July 2014.