Summary
Cardinal Health, Inc. (CAH) reported its Q3 fiscal year 2017 results, showcasing a 4% increase in revenue to $31.8 billion for the quarter, driven by growth in its specialty pharmaceutical and pharmaceutical distribution sectors. While revenue saw a positive trend, operating earnings and diluted EPS experienced a slight decline compared to the prior year period, primarily attributed to generic pharmaceutical customer pricing changes and the loss of a significant distribution customer. Despite these pressures, the company is strategically expanding its Medical segment with a significant pending acquisition of Medtronic's Patient Care, Deep Vein Thrombosis, and Nutritional Insufficiency businesses for $6.1 billion, which is expected to be funded through a combination of debt, existing cash, and operating cash flows. The company's financial health remains stable, with a cash balance of $1.4 billion at the end of the quarter. Shareholder returns are being maintained through dividends and a share repurchase program. Management's outlook indicates potential continued pressure on Pharmaceutical segment profit in fiscal 2018 due to ongoing pricing changes, but the company remains focused on strategic growth initiatives and operational efficiencies. Investors should monitor the integration of the Medtronic acquisition and the impact of pharmaceutical pricing dynamics on future profitability.
Financial Highlights
47 data points| Revenue | $31.82B |
| Cost of Revenue | $30.09B |
| Gross Profit | $1.73B |
| SG&A Expenses | $960.00M |
| Operating Income | $605.00M |
| Interest Expense | $46.00M |
| Net Income | $381.00M |
| Shares Outstanding (Basic) | 316.00M |
| Shares Outstanding (Diluted) | 318.00M |
Key Highlights
- 1Revenue increased by 4% to $31.8 billion in Q3 FY17, driven by pharmaceutical distribution and specialty pharmaceutical customers.
- 2GAAP operating earnings decreased by 8% to $605 million, and non-GAAP operating earnings decreased by 4% to $759 million for the quarter.
- 3GAAP diluted EPS increased by 3% to $1.20, and non-GAAP diluted EPS increased by 7% to $1.53 for the quarter, benefiting from a lower effective tax rate and fewer outstanding shares due to repurchases.
- 4Announced a significant $6.1 billion acquisition of Medtronic's Patient Care, Deep Vein Thrombosis, and Nutritional Insufficiency businesses, expected to close in Q1 FY18.
- 5Cash and equivalents decreased to $1.4 billion from $2.4 billion at the beginning of the fiscal year, with significant outflows for share repurchases and dividends.
- 6Pharmaceutical segment profit declined 7% year-over-year due to pricing changes and customer loss, while Medical segment profit increased by 16%.
- 7The company expects fiscal 2018 Pharmaceutical segment profit to be lower than fiscal 2017 due to continued generic pharmaceutical customer pricing changes.