Summary
Cardinal Health Inc. (CAH) reported its first quarter fiscal year 2017 results, ending September 30, 2016. The company saw a significant 14% increase in total revenue, reaching $32.0 billion, primarily driven by growth in its Pharmaceutical segment from new and existing customers. However, both GAAP and non-GAAP operating earnings and diluted EPS experienced a decline compared to the prior year. This decrease was attributed to factors such as generic pharmaceutical customer pricing changes, reduced branded pharmaceutical inflation, and the loss of a significant pharmaceutical distribution customer. Despite the decline in profitability metrics, the company's Medical segment showed a strong 26% increase in profit, bolstered by acquisitions, including the notable Cordis acquisition in the prior year, and contributions from its own branded products. The company also provided an updated outlook, now expecting fiscal 2017 Pharmaceutical segment profit to be less than fiscal 2016 profit, reflecting the ongoing challenges in the pharmaceutical distribution landscape. Investors should monitor the impact of pharmaceutical pricing changes and customer dynamics on future earnings.
Financial Highlights
47 data points| Revenue | $32.04B |
| Cost of Revenue | $30.45B |
| Gross Profit | $1.59B |
| SG&A Expenses | $920.00M |
| Operating Income | $535.00M |
| Interest Expense | $44.00M |
| Net Income | $309.00M |
| Shares Outstanding (Basic) | 320.00M |
| Shares Outstanding (Diluted) | 322.00M |
Key Highlights
- 1Total revenue increased by 14% to $32.0 billion, driven by the Pharmaceutical segment's strong customer growth.
- 2GAAP operating earnings decreased by 14% to $535 million, and non-GAAP operating earnings decreased by 9% to $669 million.
- 3GAAP diluted EPS declined by 17% to $0.96, and non-GAAP diluted EPS decreased by 10% to $1.24, due to pricing pressures and customer changes in the Pharmaceutical segment.
- 4The Medical segment's profit grew by 26% to $127 million, benefiting from acquisitions like Cordis and internal product contributions.
- 5The company repurchased $250 million of its common shares during the quarter and had $793 million remaining under its share repurchase program.
- 6Cash and equivalents decreased to $2.0 billion from $2.4 billion, partly due to share repurchases, dividends, and capital expenditures.
- 7Cardinal Health now expects fiscal 2017 Pharmaceutical segment profit to be lower than fiscal 2016, citing ongoing pricing pressures and customer dynamics.