Summary
Cardinal Health Inc. reported strong revenue growth of 21% and 20% for the three and nine months ended March 31, 2016, respectively, driven primarily by its Pharmaceutical segment and strategic acquisitions. The company demonstrated significant increases in both GAAP (11% and 15%) and non-GAAP (20% and 21%) operating earnings for the respective periods, signaling effective operational execution and integration of acquired businesses. Diluted EPS also saw substantial year-over-year growth, with non-GAAP diluted EPS reaching $1.43 for the quarter and $4.10 for the nine-month period, reflecting improved profitability. However, the company's cash and equivalents decreased due to significant investments in acquisitions ($3.4 billion), dividends, and share repurchases, indicating a strategic deployment of capital for growth and shareholder returns. The company highlighted the successful completion of three major acquisitions during the nine-month period: Cordis (medical devices), naviHealth (post-acute care management), and Harvard Drug (generic pharmaceuticals). These acquisitions are expected to expand its Medical and Pharmaceutical segments' portfolios and geographic reach. Despite substantial capital deployment, Cardinal Health maintains adequate liquidity through its existing credit facilities and operating cash flow, and remains compliant with its financial covenants, suggesting a stable financial position to support ongoing operations and future growth initiatives.
Financial Highlights
49 data points| Revenue | $30.66B |
| Cost of Revenue | $28.97B |
| Gross Profit | $1.69B |
| SG&A Expenses | $914.00M |
| Operating Income | $656.00M |
| Interest Expense | $44.00M |
| Net Income | $386.00M |
| EPS (Basic) | $1.18 |
| EPS (Diluted) | $1.17 |
| Shares Outstanding (Basic) | 328.00M |
| Shares Outstanding (Diluted) | 331.00M |
Key Highlights
- 1Revenue increased significantly by 21% (three months) and 20% (nine months) to $30.7 billion and $90.2 billion, respectively, driven by pharmaceutical distribution and acquisitions.
- 2GAAP operating earnings grew by 11% and 15% for the three and nine months, respectively, while non-GAAP operating earnings showed even stronger growth of 20% and 21%.
- 3Diluted EPS increased by 7% (GAAP) and 20% (non-GAAP) for the three-month period, and by 20% (GAAP) and 21% (non-GAAP) for the nine-month period, indicating improved profitability.
- 4The company completed three major acquisitions during the period: Cordis ($1.9B), naviHealth ($238M), and Harvard Drug ($1.1B), totaling over $3.2 billion, significantly impacting cash reserves.
- 5Cash and equivalents decreased by approximately $2 billion to $2.6 billion, largely due to $3.4 billion deployed for acquisitions.
- 6The Pharmaceutical segment remains the largest revenue driver, increasing by 22% year-over-year for both the three and nine-month periods.
- 7The Medical segment also showed robust growth, up 13% and 8% for the respective periods, boosted by acquisitions like Cordis.