Summary
Cardinal Health, Inc. (CAH) reported a solid third quarter for fiscal year 2015, demonstrating revenue growth driven by both its Pharmaceutical and Medical segments. Total revenue increased by 18% year-over-year to $25.4 billion, with the Pharmaceutical segment showing particularly strong performance due to increased sales from existing and new distribution customers, including growth from the Red Oak Sourcing venture. The company also announced a significant strategic move with the pending acquisition of Johnson & Johnson's Cordis business for $1.9 billion, which is expected to enhance the Medical segment's product portfolio. Despite revenue growth, investors should note the ongoing impact of the Walgreens contract expiration on the nine-month revenue figures, though this was partially offset by strategic initiatives. The company's financial health remains robust, with an increase in operating earnings and a healthy cash position. Management expressed confidence in the company's ability to fund its operations and strategic initiatives, including the Cordis acquisition, through existing capital resources and projected cash flow. Shareholder returns were supported by continued dividend payments and significant share repurchases during the period.
Financial Highlights
48 data points| Revenue | $25.38B |
| Cost of Revenue | $23.92B |
| Gross Profit | $1.46B |
| SG&A Expenses | $803.00M |
| Operating Income | $591.00M |
| Interest Expense | $35.00M |
| Net Income | $365.00M |
| EPS (Basic) | $1.10 |
| EPS (Diluted) | $1.09 |
| Shares Outstanding (Basic) | 330.00M |
| Shares Outstanding (Diluted) | 334.00M |
Key Highlights
- 1Total revenue for the quarter increased by 18% to $25.4 billion, driven by growth in both Pharmaceutical and Medical segments.
- 2Announced a $1.9 billion acquisition of Johnson & Johnson's Cordis business to expand the Medical segment's product offerings.
- 3Pharmaceutical segment revenue grew significantly due to increased sales from existing and new customers, and strong performance from generic programs.
- 4Net cash provided by operating activities was $1.7 billion for the nine months ended March 31, 2015.
- 5The company repurchased $684 million of its common shares during the nine months ended March 31, 2015, underscoring a commitment to shareholder returns.
- 6Operating earnings increased by 16% to $591 million for the quarter, reflecting improved gross margins and revenue growth.
- 7Successfully refinanced $1.2 billion of long-term debt at lower interest rates and longer maturities.